JPY surged and markets ramped up expectations for a December rate hike by the Bank of Japan after Governor Ueda reinforced the possibility of tightening. and highlighted stronger confidence in Japan’s economic outlook. Markets now attach an 87% chance of 25bps hike on 19th December.
USD extended last week’s weakness after ISM Manufacturing shrank more than expected. Whilst priced paid illustrated inflationary pressures, the employment component fell month-on-month.
EURUSD climbed for a sixth straight day, approaching key resistance as did GBPUSD without being able to follow through.
*Daily move - against G10 rates as of 06:00 GMT, 02.12.25
** Indicative rates - interbank rates as of 06:00 GMT, 02.12.25
Just EU inflation numbers out this morning with not much deviation expected from October. Which in turn will continue to support the EUR and the markets pricing for minimal rate chance over the next 12 months.
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