Global Forex Monitor - November 2025

October saw the US dollar extend its rebound and volatility decline against the backdrop of the US government shutdown. Strong US quarterly corporate earnings, which drove stock markets to new highs, likely contributed to the currency's strength. Similarly, the Fed's somewhat hawkish stance, which means a cut in key interest rates in December is not a done deal, also supported the currency by lessening expectations of a rate cut in December to just 16bp. The easing of US/China trade tensions also benefited the greenback.We nonetheless remain negative on the US dollar for the short term. Once the shutdown is over, the release of employment data should confirm the slowdown in US growth and once again heighten expectations of cuts in Fed Funds rates. Over the medium term, concerns about the Fed's independence, combined with high twin deficits that are more difficult for non-resident investors to finance, are also likely to weigh on the currency.In this context, the euro corrected to a low of 1.1473 against the US dollar in early November after testing a high of 1.1920 mid-September. This downward movement was largely due to the US dollar’s rebound and, to a lesser extent, the political uncertainty in France. The resilience of the European economy and the European Central Bank’s neutral tone failed to curb the pair’s correction, which saw it weaken to 1.1473. However, our view remains that the EUR/USD will firm at the end of the year to 1.18 on the back of a weaker dollar following the release of US employment data.