The dollar index retreated on Friday for a third day, extending losses from this week's five-month high as doubts about the strength of the U.S. economy crept into investors' minds following unexpectedly weak consumer sentiment.

University of Michigan preliminary sentiment for November fell more than forecast to its lowest level since June 2022 while conditions and expectations posted surprising declines. Inflation expectations were mixed, rising over the one-year horizon and falling over the five-year view. The news followed Thursday's report showing U.S.-based employers cut more than 150,000 jobs in October, the biggest reduction for the month in more than 20 years, as industries adopt AI-driven changes and intensify cost cuts. Americans last month said that they expected moderating near-term inflation pressures as they continued to worry about the outlook for the job market and their personal finances, according to a report from the Federal Reserve Bank of New York. The economic impact of the U.S. government shutdown is far worse than expected, but the U.S. economy is likely to rebound quickly once it ends, White House economic adviser Kevin Hassett said on Friday. The Fed should "proceed slowly" in approving further interest rate cuts as monetary policy moves closer to a neutral stance, Fed Vice Chair Philip Jefferson said on Friday. EUR/USD techs are now leaning bullish with RSIs rising and spot above the 10-DMA. USD/JPY continues to show resilience despite equity market softness, but bulls still have some damage control to complete following recent losses. AUD/USD edged higher but techs lean bearsh with monthly RSI falling and spot remaining below the 10-, 21- and 55-DMAs.

Sterling extended its rebound for a third day, putting in a high of 1.3175, with resistance at the 1.3190 daily conversion line and 1.3265 rising 200-DMA.

U.S. Treasury yields were down as much as 2.8bps in afternoon trade, with the 2s-10s curve steepening about 1bp.

The S&P 500 was trading down 0.68% in New York afternoon, as concerns about the economy and sky-high valuations in the technology sector soured sentiment.

WTI crude oil rose 0.45% and copper eased 0.26%.

Gold rose 0.7%, with the softening dollar, U.S. government shutdown uncertainty and falling stocks all in the mix.

Heading toward the close: EUR/USD +0.2%, USD/JPY +0.07%, GBP/USD +0.22%, AUD/USD +0.07%, DXY -0.23%, EUR/JPY +0.31%, GBP/JPY +0.35%, AUD/JPY +0.24%.(Burton Frierson)

Overview: Crédit Agricole Sees USD Vulnerable As Weak Data And Political Shifts Undermine Its Recent Momentum.

• The bank notes that the USD rally since early October is facing its first major test, amid soft U.S. labor data and uncertainty over trade tariffs, which have tempered the hawkish Fed repricing seen after the October FOMC.

• Crédit Agricole argues that recent local election results may accelerate efforts to end the government shutdown, potentially triggering renewed USD underperformance.

• “An end to the shutdown and a resumption of economic data releases could highlight its negative economic impact and embolden the doves,” the bank writes.

• The bank adds that as the shutdown ends and Treasury cash hoarding unwinds, the USD liquidity premium could fade, removing another layer of support for the greenback.

USD/JPY continues to show resilience despite equity market softness, but bulls still have some damage control to complete following recent losses.

Although weak equity performance amid year-end profit-taking and soft data is expected to boost the yen's haven appeal, the currency pair is holding stable following a poor University of Michigan sentiment reading.

This muted reaction may stem from reduced positioning, as yen futures open interest has dropped significantly from peaks seen in August and May.

Options markets also reflect a lack of urgency to buy yen. One-month USD/JPY implied volatility sits at a moderate 8%, while risk reversals show a 1% premium for yen calls—higher than the more-subdued 0.6% level seen in one-year tenors.

Supporting USD/JPY are hawkish Fed signals delaying rate cuts, limited concern over a U.S. government shutdown, steady dollar demand from Japanese importers, and optimism that a potential Japanese fiscal package could lift equities and weaken the yen.

However, USD/JPY remains vulnerable. A downturn in Japanese equities could trigger selling as foreign investors unwind currency-hedged Japanese stock positions built since the LDP’s selection of Sanae Takaichi as leader. A dovish Fed shift amid sharply weaker non-Federal employment data could also pressure the pair. Key support levels to watch that could see more shorts emerge include the 21-DMA at 152.45, the 152 pivot, Ichimoku cloud top at 150.77 and 150.59 bull hammer on October 17. Breaking a series of lower highs and a close 154.50 is needed to entice bulls.
Yen ETF


Yen Risky


Yen


(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

Overview: SocGen Sees USD Vulnerable To Softer Labor Data And Overstated Economic Optimism.

• The bank argues that FX markets are overly optimistic about the U.S. economy, citing recent Revelio data showing a net loss of 9,000 jobs in October, mainly in the public sector.

• SocGen notes that GDP growth has consistently outpaced employment growth, but warns this gap must widen further to sustain the 2.2% average growth the IMF expects — a stretch given recent data.

• As data normalizes post-shutdown, SocGen expects USD vulnerability to rise, allowing EUR/USD to climb toward 1.20 by late 2025, before reverting to a 1.05–1.15 range next year as U.S. productivity leadership reasserts itself.

• Lack of conviction among dollar bulls has aided the yen's recovery

• While the ongoing de-risking in frothy AI/tech stocks has also underpinned

• PM Takaichi appoints big spending advocates to government panel

• Interestingly, JPY impact was muted - signals USD/JPY topside struggle

• Resistance at 154.40 (cluster of recent highs). 155.50 is the key hurdle

• With US equities underpressure, risks are turning lower for USD/JPY

• This puts initial focus on the Oct 29 low at 151.54, further support at 150
USDJPY vs SPX


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Overview: BofA Outlines A Framework For How AI Adoption Could Shape USD Dynamics Across Investment, Productivity, And Market Cycles.

• The bank sees AI’s near-term impact as mixed, with labor market disruptions posing downside risks for the USD as firms adjust during the transition phase.

• Over the long term, AI-driven productivity gains could lift U.S. real rates, creating a net-positive effect for the dollar despite broader disinflationary forces.

• BofA notes that the U.S. capex boom linked to tech investment should remain USD supportive, given its strong GDP contribution.

• Historically, during the dot-com era, the USD rallied both during and after the bubble, suggesting AI-related cycles may reinforce the USD’s structural resilience even amid evolving “exceptionalism” narratives.

Overview: JP Morgan Turns Cautiously Optimistic On GBP As Market Sentiment Nears Peak Pessimism Ahead Of The Budget.

• The bank says the BoE meeting was a “damp squib”, with Governor Bailey opting to wait for the Budget, while a dovish voter split was offset by slightly hawkish MPR forecasts.

• GBP initially fell on Reeves’ speech, but JP Morgan suggests the market may have reached peak pessimism toward the currency.

• “I have stepped aside from my long-held short sterling bias and even flirted with longs yesterday,” the strategist notes.

• JP Morgan sees scope for GBP short covering before the Budget, maintaining a tactical bias skewed toward being long pounds in the near term

• EUR/USD 0.0%, USD/JPY 0.21%, GBP/USD -0.26%, AUD/USD 0.08%

• S&P E-minis -0.06%, DAX -0.55%, Nikkei 225 -1.19%, FTSE -0.57%

• Bearish signal may encourage EUR/USD traders to sell

• USD/JPY climbs despite a bearish tech signal and stock falls

• GBP/USD on 1.31 handle after US data-spurred gain

• AUD/USD holds below 0.65 after three-week low respected

• Option expiries . U.S. Open
(Martin Miller is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of silver miners gain premarket, tracking rising prices of the metal [GOL/]

• Spot silver up 1.6% at $48.772/ounce on expectations for further interest rate cuts from the U.S. Federal Reserve

• Hecla Mining up 1.9% and Coeur Mining rises 2.3%

• Canadian miner Wheaton Precious Metals up 1.2%

• Abrdn Physical Silver Shares ETF up 2.5% and iShares Silver Trust up 2.6%

(Reporting by Pooja Menon in Bengaluru)

• U.S.-listed shares of gold miners rise premarket, tracking gains in bullion prices [GOL/]

• Spot gold up 0.8% at $4,010.72/ounce

• Prices rise as expectations for further interest rate cuts from the Federal Reserve and lingering concerns over U.S. economic outlook amid a prolonged government shutdown buoyed demand

• Top miners Newmont and Barrick Mining both rise 1.4% and 1%, respectively

• U.S.-listed shares of South African miners Sibanye Stillwater and Gold Fields gain 3% and 3.8%, respectively

• Canadian miners Kinross Gold , and Agnico Eagle Mines , up 1.6% and 1.5%, respectively

(Reporting by Katha Kalia in Bengaluru)

• EUR/CHF is surprisingly firm despite the recent U.S. tech de-risking

• Though, difficult to chase EUR/CHF upside given current equity fragility

• Resistance at 0.9320 tested, further hurdles sit at 0.9360/74

• Key support remains situated at 0.9200/20

• Overall, cross continues to be a range trade (0.9200/0.9450)

• CHF FX reserves dip in Oct, but likely due to valuation effects
EURCHF daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• AUD/USD has traded a 22 pip range thus far Friday; 0.6468-0.6490

• 0.6468 is four pips shy of Thursday's risk-off spurred low

• Nasdaq fell 1.9% on Thursday (AUD is risk-sensitive)

• Thursday's AUD/USD low was five pips shy of Wednesday's three-week low

• There is a large 0.6500 option expiry for the 10am ET NY cut

AUDUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Cable has traded a quarter-cent range thus far Friday; 1.31135-1.31385

• The peak of that range is 3.5 pips shy of Thursday's three-day high

• Rise to Thursday aided by short-covering (1.3011 was 7-month low Wednesday)

• Short-covering influenced by BoE rate hold and U.S. labor market data

• Private reports suggest U.S. labor market weakened in October

• Reeves plans income tax rise in UK budget on November 26, The Times reports

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• EUR/USD 55-DMA 1.1666 set to cross under the 100-DMA 1.1665

• Bearish signal may encourage EUR/USD traders to sell

• Traders who have successfully bet on a rise may book more profits

• Between Sep-Nov profit taking has led to a 1.1918-1.1569 slide

• Oversold situation at the time of Nov low has been alleviated

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• GBP/USD down 0.2% in Asia, drifts lower after Thursday's sizable bounce

• BoE's knife-edge decision to holds rates taken in stride as Dec cut looms

• Markets price in 60% probability of Dec easing ; focus turns to UK budget

• Reeves plans income tax rise in UK budget, The Times reports

• GBP downside limited as U.S. economic uncertainty weighs on dollar

• Longest U.S. govt shutdown, doubts on Trump's tariff legality undermine USD

• Resistance 1.3175-85, 1.3240, support 1.3100-10, 1.3060

• Asia range 1.3116-1.31385
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

Overview: BofA Highlights Rare Alignment In Yield Curve Shapes Despite Divergent Policy Paths Across G10 Central Banks.

• The bank observes a remarkable convergence in yield curve slopes and curvature across G10 markets, even as policy expectations diverge — with the Fed and BoE priced for cuts, the BoJ for hikes, and the ECB, RBA, and BoC largely done.

• BofA notes this curve convergence exceeds the fall in global rates volatility and contradicts idiosyncratic term premium trends, suggesting pricing dislocations across markets.

• To capitalize, BofA says it is long AU rates versus Japan, long EUR rates outright, and buying forward vol in the US while hedging upside risks to US rates via payer ladders.

• Shares of QMines Ltd rise as much as 5.6% to A$0.057, their biggest intraday pct gain since October 21

• Stock hits its highest level since October 27

• The gold explorer finds several large gold targets at its Mount Mackenzie project in Queensland

• YTD, stock up 1.9%, including current session's move

(Reporting by Ananya Verma in Bengaluru)

• Shares of Savannah Goldfields rise 5.3% to A$0.02, on track for their strongest session since October 29, if gains hold

• Co resumes gold production at its Georgetown gold processing plant

• Stock earlier rose as much as 26.3% to A$0.024, marking its highest level since October 31

• Stock up 3.9%, YTD, including current moves

(Reporting by Jasmeen Ara Shaikh in Bengaluru)

• AUD/USD +0.05% Fri as pair steadies following Thur risk-off sell down

• AUD -1.0% in Nov, but RBA aversion to ease OCR further may become bear trap

• Poor U.S. data, ongoing government shutdown weighing on UST yields & USD

• U.S. Supreme Court continues to evaluate legality of Trump's global tariffs

• CN Oct trade data due Fri; RBA's Hauser speaking on AU economy Mon

• AUD may form base above Oct 14 0.64405 low, topside reasonably open

• Range Asia 0.6477-86, support 0.6440 0.6415, resistance 0.6630 0.6707
AUD Daily 200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• GBP/USD stays bid in Asia after closing 0.65% higher on Thursday

• Boosted by broadly weaker dollar and BoE decision to hold rates

• Bank of England holds rates in knife-edge vote that hints at December cut

• December rate cut probability at 65%; focus now turns to Nov 26 UK budget

• Reeves plans income tax rise in UK budget, The Times reports

• Resistance 1.3175-85, 1.3240, support 1.3100-10, 1.3060

• Thursday range 1.3047-1.3142
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• USD/THB opens lower, selling pressure in USD after soft labor data weighs

• Pair traded 32.33-32.45 range in NY, closed at 32.41

• Supports at 32.30, 32.20; resistance at 32.50, 32.60 intraday

• Rally in gold prices amid tariff uncertainty to add pressure on USD/THB

• DXY last at 99.73, down from 100.15 high yesterday

• UST yields lower as data indicates cooling job market, 10yr last 4.09%

• Stocks down on lower on tech valuations, economic jitters

• Thailand invests $153 million to boost industrial competitiveness
THB

(Catherine Tan is a Reuters market analyst. The views expressed are her own.)

Overview: MUFG Sees The BoE Preparing To Ease In December As Inflation Trends Lower And Fiscal Clarity Improves.

• The bank notes the BoE kept rates unchanged at 4.00% in a dovish hold, with four members voting for a cut and growing confidence that inflation is trending downward.

• Governor Bailey remains pivotal in a divided MPC — MUFG says he appears “close to joining the doves” but prefers to wait until December, when inflation and fiscal data will offer clearer signals.

• MUFG expects that inflation broadly matching BoE forecasts and no fiscal surprises at the Budget would prompt a rate cut in December, followed by two additional cuts in 2026.

• EUR/USD +0.5% from Thur 1.14915 low as USD slides on mounting jobs concern

• U.S. layoffs at 22-year high according to private side Revelio Labs data

• Ongoing U.S. government shutdown impacts further weighing on UST yields/USD

• U.S. Supreme Court continues to evaluate legality of Trump's global tariffs

• EU Sep retail sales -0.1% m/m, +1.0% y/y (poll +0.2%, +1.0% respectively)

• EU Sep industrial production/trade, Q3 employment/GDP data all due next week

• EUR looks set to extend rebound towards 1.1594 55-DMA, break above bullish

• Range early Asia 1.1543-49, support 1.1470 1.1392, resistance 1.1670 1.19185
EUR Daily 55-DMA


DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.5% from Thur 0.6518 high, despite domestic woe sending USD lower

• Private side data from Revelio Labs indicates U.S. layoffs at 22-year high

• Negative impacts of ongoing government shutdown also weighing on UST yields

• U.S. Supreme Court continues to evaluate legality of Trump's global tariffs

• AUD bears likely to be disappointed as fundamentals play out pre-year end

• Buying AUD ahead of 0.6440, s/l sufficiently below 0.6415 looks a sharp play

• CN Oct trade data due Fri; RBA's Hauser speaking on AU economy Mon

• Overnight range 0.6464-0.6518, support 0.6440 0.6415, resistance 0.6630
AUD Daily 55-DMA


DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)