The FX market opens with renewed momentum as the euro holds firm, BoJ tightening bets rise, and the USD continues to soften. With Eurozone inflation data in focus, today’s moves could set the tone for the days ahead.
Key Insights:
- The euro is expected to remain supported at this point.
Market Recap:
The Japanese yen jumped after BoJ Governor Ueda signalled greater confidence in the economic outlook, prompting markets to sharply raise expectations of a December policy move. Investors now see an 87% probability of a 25bp hike on the 19th of December meeting.
The US dollar remained under pressure, extending last week’s decline as the ISM Manufacturing report contracted more than anticipated. While the prices-paid component hinted at lingering inflation, the employment index slipped from the previous month.
In the FX majors, EUR/USD advanced for a sixth consecutive session and is edging closer to notable resistance. GBP/USD also firmed but struggled to maintain upward momentum.
Today's Market Watch:
Eurozone inflation figures are due this morning, and markets are anticipating little change from October’s readings. If the data aligns with expectations, it should help keep the euro supported, reinforcing the view that the ECB is unlikely to adjust interest rates significantly over the coming year.
2nd December 2025
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