Forex investors remain focused on the ongoing U.S. government shutdown, now entering its sixth day. On Friday, the Senate failed to approve the funding bills needed to end the shutdown: both Republican and Democratic proposals were rejected due to insufficient votes. White House economic adviser Kevin Hassett stated that layoffs of federal employees would begin unless President Donald Trump sees progress in negotiations with congressional Democrats. Meanwhile, Federal Reserve Vice Chair Philip Jefferson warned that the labor market could face pressure without monetary support, and board member Steven Miran again advocated for an aggressive rate cut, noting that the current level significantly restrains economic recovery.

Eurozone

The euro is weakening against the pound and U.S. dollar but shows mixed dynamics versus the yen.

Pressure on the single currency increased after France, the second-largest economy in the EU, plunged into a political crisis. Today, Prime Minister Sébastien Lecornu resigned due to disagreements with political opponents — just weeks after taking office. Investors were disappointed, as the government still needs to adopt a budget plan that includes spending cuts and tax increases. France must reduce its 2024 deficit of 5.8% of GDP and tackle a debt level of 113% of GDP, far exceeding the EU’s 3% and 60% benchmarks. The issue is now postponed indefinitely, raising uncertainty across the bloc.

United Kingdom

The pound is weakening against the U.S. dollar but strengthening versus the euro and yen.

Today’s data on business activity in the construction sector showed an improvement: the PMI rose from 45.5 to 46.2 points, exceeding expectations of 46.1 but remaining in contraction territory for the ninth consecutive month. Construction companies reported that major investment decisions are being delayed until November 26, when Finance Minister Rachel Reeves will present the annual budget, which includes significant tax hikes. A similar pattern persists in industrial and non-industrial sectors, while expectations for housing market growth next year remain among the lowest since late 2022.

Japan

The yen is weakening against the pound and U.S. dollar but showing mixed movement versus the euro.

Investors are focused on the results of Japan’s ruling Liberal Democratic Party leadership election, where Sanae Takaichi became the country’s first female prime minister. The outcome lowers the likelihood of another rate hike by the Bank of Japan this year. Analysts believe that Takaichi, who views Japan’s economy as fragile, may urge the central bank to refrain from tightening policy. Her administration is expected to expand public investment and programs aimed at stimulating demand and private capital spending.

Australia

The Australian dollar is strengthening against the euro, pound, yen, and U.S. dollar.

Fresh inflation data from the Melbourne Institute showed an increase from –0.3% to 0.4%, signaling persistent price pressures. The figures complicate the Reserve Bank of Australia’s monetary policy decisions. Last week, the RBA kept rates unchanged at 3.60%, citing rising inflation, but subsequent data have been mixed: the manufacturing PMI slipped from 51.6 to 51.4, services from 55.8 to 52.4, and the composite index from 55.5 to 52.4. Meanwhile, August exports fell sharply from 2.5% to –7.8%, while imports rebounded from –2.4% to 3.2%.

Oil

Oil prices are attempting to extend their upward momentum after OPEC+ announced smaller-than-expected production increases for November — just 137,000 barrels per day, matching October’s growth. Before the meeting, sources had hinted at a potential hike of 274,000–411,000 barrels per day, meaning concerns about market oversupply have likely eased.

However, analysts note that upside potential for “black gold” remains limited in the near term as refinery maintenance season begins in the Middle East.