(MENAFN- Seven Media) Dubai, UAE, 17 November 2025: Last week's wobbliness in equity markets and tech stocks did not carry over into currency markets. G10 currencies traded in tight ranges, with the exception of the Swiss Franc which rallied hard on news of a trade agreement with the US that lowers Swiss tariffs to the European level, and the Japanese Yen, down on renewed concerns about fiscal and monetary profligacy. Although the US government shutdown is over, uncertainty remains about which key missing economic reports will be released and when. The key Federal Reserve rate decision in December will wholly depend on this data, and therefore currency markets are afraid to embrace any trends before the smoke clears on the state of the US economy.

Enrique DíazÁÁlvarez, Chief Economist at Ebury said: “This week the focus will be on the restart of economic releases in the US. In particular, the delayed September payrolls report will be published Thursday and will likely be the week's most market-moving data point. The minutes from the Federal Reserve's October meeting and UK inflation data on Wednesday, along with the global release of the Purchasing Managers' Index (PMI) of business activity on Friday will also be keenly watched. We should have a clearer picture of the outlook for both the Fed and the Bank of England by the end of this week. As to the latter, the reaction from the gilt market to the latest budget headlines will be key for Sterling.”

GBP
The Labor government's complete turnaround last week on increasing income tax rates brought renewed nervousness to the UK bond market. Bonds sold off all Friday long after the announcement, and the UK is once again leading the latest leg in the upward move of rates in G10 countries. UK stocks also underperformed. Labor data for September and October published last week confirmed the weakening trend in the job market, as unemployment ticks up and businesses continued to shed workers. Soft GDP figures capped a grim week for the UK and Sterling. The sell off in the gilt market and stubbornly high inflation complicate what would otherwise be the Bank of England's obvious response to softening data: cutting rates.

EUR
The ECB finds itself in a easier spot than the Bank of England or the Federal Reserve. Its rate cutting is largely done, and inflation is close to target and at least not trending up. The labor market is showing resiliency, and is still creating jobs overall, though with wide regional variations. The fears over French fiscal deficits are in our view largely offset by the fiscal loosening in Germany, and we continue to forecast a gentle upward trend for the Euro over the coming months.

USD
The US shutdown ended last week, as an agreement between Democrats and Republicans will fund the Federal government through at least January. The very sparse private data published over the last two weeks suggests that net job creation has dried up recently, though there is still little sign of mass dismissals. However, the dollar has proven resilient, shrugging off both the uncertainty and the tentative evidence of a slowdown because of the Federal Reserve's recent hawkish turn. Another notable development is Trump's willingness to ese tariffs in order to try and lower the cost of living, an implicitly acknowledgement that tariffs are inflationary, and that the average tariff level is more likely to move down than up over the medium term.

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