• US 10-year yield back above 5% after Fed-speak shifts hawkish

• USD has outperformed, but the bar for a 50bp hike remains a high one

• CHF has strongest inverse link to yields, hence underperformance - cleanest FX expression of yield move

• Spot nearing resistance at 0.8380-0.8400. Next objective above here would be 0.8475 (May 2025 peak)

• Plethora of upcoming Fed-speak will be key to gauge appetite for larger hike, particularly Williams
rolling correlation FX and US 10 yr yield

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

JP Morgan discusses the lates yen's BoP flows.

"Since the LDP leadership election last October, the yen has weakened across the board against G10 currencies. However, over the same period, FX flows attributable to the balance of payments have shown a record net yen buying, partly due to ¥27 trillion ($170 billion) of yen-buying intervention.

Japan’s current account surplus in 2026 is on track to reach a new record, while outflows related to direct and portfolio investment abroad have declined further," JPM notes.

"Therefore, the yen’s depreciation since PM Takaichi took office is difficult to explain without assuming that substantial yen selling has taken place outside the balance-of-payments items (“off-balance” yen selling). USD/JPY is currently significantly above its fair value implied by the US–Japan interest rate differential," JPM adds.

Bank of America Global Research discusses the latest IMF COFER data for Q2.

"One of the key drivers behind our structurally bearish view on USD has been the argument that global reserve managers would continue to diversify away from the USD due to several challenges, including fiscal dominance, USD debasement and geopolitics. Admittedly, the dedollarisation topic has attracted peak interest during USD stress points, notably when the correlation between USD and US Treasuries turns negative, a potentially signaling concurrent selling of US assets," BofA notes.

Liberation Day proved to be a pivotal but transitory moment in the "sell America" debate and despite sporadic episodes where the correlation has flipped, dedollarisation has all but faded into the background as all things AI dominate. The limitations of trading the dedollarisation theme are obvious, given both a lack of timely data and transparency from reserve managers. Yet the Q2 IMF COFER data do show the first meaningful shift away from the USD and into other traditional reserve currencies, notably the EUR and AUD," BofA adds.

(Repeat with no changes )

• FX option strikes expire at 10am New York/15:00 GMT on Thursday November 12

• EUR/USD: 1.1000 (1.1BLN), 1.1050-60 (1BLN), 1.1070-75 (1.75BLN), 1.1080-85 (1.1BLN)

• 1.1095-1.1100 (2.8BLN), 1.1120-25 (2.9BLN), 1.1135-40 (3.3BLN)

• USD/CHF: 0.8275-80 (581M), 0.8325 (238M), 0.8400 (201M).

EUR/CHF: 0.9200 (201M), 0.9215 (135M)

• GBP/USD: 1.3240 (221M), 1.3245 (205M), 1.3250 (1.3BLN), 1.3260-65 (415M)

• EUR/GBP: 0.8315 (348M), 0.8375 (337M)

• AUD/USD: 0.6780-90 (746M), 0.6870-80 (1.8BLN), 0.6900 (1.3BLN)

• NZD/USD: 0.5535 (250M), 0.5615 (316M). AUD/NZD: 1.2300 (833M)

• USD/JPY: 158.45-50 (1.6BLN), 159.35 (577M), 159.50 (1.1BLN), 160.00-05 (388M)

• FX options wrap - USD gains lifts vols - caution not fear (Richard Pace is a Reuters market analyst. The views expressed are his own)

• US-listed shares of gold miners down premarket, tracking bullion price decline [GOL/]

• Spot gold down 0.9% at $3,953.50/ounce after touching lowest since November 4 earlier in the session

• Gold falls for a third straight session to hit lowest in over a week, weighed by a robust US dollar, expectations of further Fed monetary tightening and hawkish signals from policymakers

• Top miners Newmont , Barrick Mining fall 1.3% and 1%, respectively

• South African miners Gold Fields and AngloGold Ashanti drop 1.8% and 2.2%, respectively

• Canadian miners: Agnico Eagle Mines dips 1.6%, Kinross Gold falls 1.3%

(Reporting by Pooja Menon in Bengaluru)

• EUR/USD regains 1.1100 - massive FX option strike expiries and related hedging flows can help contain

• DTCC traded options data shows €9-billion between 1.1070-1.1125 - the bulk between 1.1095-1.1125

• Benchmark 1-month implied volatility retreats below 6.0 after Wed's lift from 5.75 to 6.25, other dates ease, too

• Recall that 6.25 was well below early October's multi month highs at 7.25

• 1-month 25 delta risk reversals up from 0.15 to 0.45 this week, now 0.4 - also well below early Oct peak at 1.6

• This week's USD and option gains lacked the panic demand seen through late Sep-early Oct - suggested downside limited

• 1.1000 holds bigger option barriers and triggers. Expect a higher perceived threat to 1.10 to lift vols and EUR put demand
EUR/USD FXO implied volatility


EUR/USD 25 delta risk-reversals

(Richard Pace is a Reuters market analyst. The views expressed are his own)

Nov 12 (Reuters) - Federal Reserve hike bets leave USD/JPY poised to test 160 and 161, despite concerns from Japan.

The dollar has risen to a 19-month high as bets on a Fed rate hike have grown and meanwhile the yen is under pressure.

USD/JPY closed up 108 pips on Wednesday, its biggest one-day rise since September. It registered a daily close above the 159.75 Fibonacci level, a 61.8% retracement of the 163.99 to 152.89 (July to September) EBS fall, which is a bullish technical development.

USD/JPY has climbed further on Thursday from 159.49 to 159.94, with the scope growing for eventual gains through the 160 and 161 psychological levels.

As USD/JPY nears 160, Japan's top currency diplomat Atsushi Mimura warned that markets should not forget the risk of intervention.

However, the yen has been kept under pressure as dovish Bank of Japan policymaker Toichiro Asada pushed back against calls for an early rate hike.

Seasonality may also favour the yen's weakness. EUR/JPY usually rises in November and the daily chart hints at a repeat.
Daily Chart

(USD/JPY Martin Miller is a Reuters market analyst. The views expressed are his own)

• USD/JPY tests 160.00, the prior intervention zone, with a notable increase in topside option demand

• The demand suggests the market isn't ruling out further gains above 160.00

• Topside strikes gain value as spot rises, so they will cover any short topside positions

• Biggest trade today: a 3-week 162.00 strike at 6.55 implied vol - dealers say $800 million traded

• Japan's Mimura says markets shouldn't forget intervention risks as the yen nears 160
USD/JPY DAILY CHART (EBS)

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable holds above 1.3251 after UK Q3 GDP growth matches 0.7% forecast

• 1.3251 was four-week low in Asia, as USD index rose to 19-month high

• 1.3459 was high 48 hours ago - before hot US CPI, hawkish Fed officials

• Dollar zooms on bets US can withstand higher interest rates

• There is a big 1.3250 option expiry for the New York cut

• BoE's Greene says it is right to proactively tighten monetary policy stance - FT

GBPUSD

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

• FX option strikes expire at 10am New York/15:00 GMT on Thursday November 12

• EUR/USD: 1.1000 (1.1BLN), 1.1050-60 (1BLN), 1.1070-75 (1.75BLN), 1.1080-85 (1.1BLN)

• 1.1095-1.1100 (2.8BLN), 1.1120-25 (2.9BLN), 1.1135-40 (3.3BLN)

• USD/CHF: 0.8275-80 (581M), 0.8325 (238M), 0.8400 (201M).

EUR/CHF: 0.9200 (201M), 0.9215 (135M)

• GBP/USD: 1.3240 (221M), 1.3245 (205M), 1.3250 (1.3BLN), 1.3260-65 (415M)

• EUR/GBP: 0.8315 (348M), 0.8375 (337M)

• AUD/USD: 0.6780-90 (746M), 0.6870-80 (1.8BLN), 0.6900 (1.3BLN)

• NZD/USD: 0.5535 (250M), 0.5615 (316M). AUD/NZD: 1.2300 (833M)

• USD/JPY: 158.45-50 (1.6BLN), 159.35 (577M), 159.50 (1.1BLN), 160.00-05 (388M)

• FX options wrap - USD gains lifts vols - caution not fear (Richard Pace is a Reuters market analyst. The views expressed are his own)

• EUR/USD heavy in Asia, 1.1101 to 1.1067 EBS after fall to 1.1082 yesterday

• Lowest now since 1.1065 trough May 12, 2025, break projects test of 1.1000

• Break below 1.1000 could seen tests towards 1.0880 trough on April 7, 2025

• Optionality at 1.1000 seen large, barriers also very possible

• Resistance now eyed at 1.1100 and at 1.1170 high yesterday

• Option expiries today to help cap upside, between 1.1100-85 total E13.2 bln

• Large in area too, between 1.1070-95 E3.2 bln, below 1.1015-60 E1.6 bln

• Another E1.3 bln between 1.1095-1.1000 strikes

• USD broadly bid and leading to weakness in most major FX pairs

• Bounce in crude oil prices, rising expectations of Fed hikes cited

• EUR/JPY 177.18 to 176.83 EBS, towards 176.29 trough last Friday?

• EUR/GBP heavy too, 0.8350-59, towards 0.8323/24 double bottom Nov 5/Oct 30?

• EUR/CHF fades after push up to 0.9248 yesterday, Asia 0.9227-36

• EUR/GBP, EUR/CHF see option expiries today at 0.8315/75, between 0.9200-15

• Related comments , , ,

• And , , also , for more click on [FXBUZ]

EUR/USD:


EUR/JPY:


EUR/CHF:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD down 0.1% Thur as Nvidia's CEO crisis dampens risk sentiment

• AUD 0.6835 support pivotal, downtrend would quicken on break below

• RBA Nov meeting minutes due & Governor Bullock speaking at ASIC forum Tue

• AU Oct jobs update (Nov 19) crucial, prior -39.3k jobs, 4.7% unemployment

• Sticky U.S. inflation has Fed officials considering accelerated tightening

• Futures pricing currently implies 89.4% chance of 25 bps Fed hike on Dec 9

• Range Asia 0.6836-54 support 0.6835 0.6662, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA

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

Nov 12 (Reuters) - Barring fresh Japanese FX intervention , further USD/JPY gains look unavoidable given the currently more hawkish US Federal Reserve view and the Bank of Japan's more leisurely pace of policy tightening.

The current BOJ view is for 25-basis-point moves every three months. Totan Research/ICAP shows the probability of a rate hike in December at 85% and again in March at 62%. There is no expectation of a 50 bps hikein either month.

In contrast, there is a view that the Fed could consider a 50 bp move at its December Federal Open Market Committee meeting after Fed Governor Christopher Waller said as much Tuesday . While it remains a slim possibility, the market is actively considering this proposition , , .

Sticky USD-denominated crude oil prices present another reason for continuing dollar strength. Prices have retreated considerably from recent highs, but Brent futures remain relatively lofty above $90/barrel. With no clear time frame for tensions in the Middle East to unwind, further declines may be difficult.

Wall Street also looks to have regained its footing after the recent tech and AI-share sell-off. Japanese and broader global investment in US stocks remains high, and not just for Anthropic's impending blockbuster IPO , .

Japanese shares are also seeing good rebounds, and foreign investor hedging of any fresh buys with currency hedges cannot be ruled out , .

Japanese exporters remain ready to sell USD/JPY and other major currencies on rallies but importers continue to show buy-side interest at almost every Tokyo fix, helping to support all yen pairs on yen rallies , .

Related comment , also . For more click on [FXBUZ]

USD/JPY:


Brent crude oil:


NASDAQ Index:

(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)

• AUD/USD -0.1% in Asia Thur as scrutiny of Nvidia CEO Huang intensifies

• AUD 0.6835 support pivotal, downswing would accelerate on break below

• Nvidia in crisis as board considers ousting Huang, stock -8.6% after hours

• Nasdaq futures down 1%, broader risk sentiment under pressure

• Sticky U.S. inflation has Fed officials considering accelerated tightening

• Futures pricing currently implies 88.7% chance of 25 bps Fed hike on Dec 9

• RBA Nov meeting minutes due & Governor Bullock speaking at ASIC forum Tue

• Range Asia 0.6836-54 support 0.6835 0.6662, resistance 0.7140 0.7282
AUD Daily 21/55/100/200-DMA

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

• USD/JPY up a leg overnight on broad USD strength, to 159.94 EBS

• Asia so far today 159.50-77 and holding relatively bid

• Spec long profit-taking ahead of 160.00 but bias up?

• Inflation concerns, view Fed could hike 50 bps in December cited

• Eyes will be on US yields following US Veterans Day holiday yesterday

• Wall St stocks higher, another reason for USD buys, stock-yen correlation

• Sticky crude oil prices also a factor boosting USD, ME tensions still high

• Some concerns over Japanese FX intervention but only above 160.00?

• Given hawkish Fed view, more leisurely BOJ hikes, JPY to stay on back foot?

• But Japanese exporters expected to offer, importers maybe less enthusiastic

• Option expiries today more supportive than not

• Between 158.40-50 $1.8 bln, 159.00-50 $2.4 bln, 160.00-35 only @$800 mln

• Related comments , , ,

• And , also

• Other markets , , on Fed
USD/JPY:


NASDAQ Index:


Brent crude oil:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD -0.7% from Wed 0.5613 high as broad USD index reaches 19-month high

• NZ Oct electronic card retail sales -0.7% m/m (prior -0.4%), +0.3% y/y

• Sticky U.S. inflation has Fed officials considering accelerated tightening

• Futures pricing currently implies 88% chance of 25 bps Fed hike on Dec 9

• NZD targets 0.5485 support, break below would stoke excitement amongst bears

• NZ PM Luxon likely to retain power, but may need more minor party support

• Range NZ 0.5562-73, support 0.5485, resistance 0.5710 0.5995 0.6012
NZD Daily 21/55/100-DMA


DXY Daily 55/100/200-DMA

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

Danske Research discusses the Fed rate outlook and EUR/USD target.

"For now, we stick with our baseline call of 2x25bp hikes in December and March. That said, we think it is generally justified that markets price in around 10% probability of a jumbo hike in December. Not only was the broad-based upside surprise in core CPI exactly what the Fed's Waller warned about in his remarks before the release, but we also heard more concerned remarks from the Fed's Bowman, who has typically been among the most dovish members of the committee," Danske notes.

"We still expect EUR/USD to continue trending lower from here, and target 1.10," Danske adds.

• AUD/USD -0.5% from Wed 0.6885 high as DXY hits 102.96 19-month high

• AUD 0.6835 support pivotal, downswing would accelerate on break below

• Deteriorating U.S. inflation outlook has Fed officials pondering higher FFR

• Futures pricing currently implies 88% chance of 25 bps Fed hike on Dec 9

• RBA Nov meeting minutes due & Governor Bullock speaking at ASIC forum Nov 17

• Overnight range 0.6844-775 support 0.6835 0.6662, resistance 0.7140 0.7282
DXY Daily 55/100/200-DMA


AUD Daily 21/55/100-DMA

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

• GBP$ near NorAm low in afternoon trade, -0.54% at 1.3274; NY range 1.3315-1.3267

• Spate of US data (payrolls, CPI) boosts Fed hike expectations, providing lift to USD

• LSEG's IRPR pricing 100% odds for Dec 2026 25bp hike; +73bp as early as June 2027

• Despite more aggressive BoE hike outlook, shift to higher Fed tack USD positive

• UK Sept GDP, output data on Thursday, US PPI on Friday; UK price data on Nov 18

• GBP$ supt 1.3267 Wednesday low, 1.3200 psychological lvl, 1.3137 Daily low Oct 14

• Res 1.3300 psychological lvl, 1.3328 falling 30-HYMA, 1.3385- 50% Fib of 1.3503-1.3267

GBP Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research discusses its Fed rate outlook.

"We continue to expect a second 25bp rate hike in December and are adding a third 25bp hike to our forecast in March 2027. A third hike could come earlier in January, but we think March is a bit more likely because we expect the November and December inflation reports to be softer but then expect larger start-of-the-year price increases amidst ongoing cost pressures to boost inflation in January," GS notes.

"We have left our forecast for the eventual terminal fed funds rate unchanged at 3.25-3.5%, but we now expect rate cuts to begin one quarter later in December 2027 (vs. September 2027 previously), followed by additional cuts in March, June, and September 2028," GS adds.

GS targets EUR/USD at 1.14 by year-end.

Sterling has slid further after Tuesday’s US CPI reinforced a more hawkish Federal Reserve narrative, pushing bulls to capitulate and testing late-October lows below 1.33.

With the cash Treasury market closed for Veterans Day, FX traders are not taking direction from US rates. Treasury futures are slightly lower across the curve, and US equities are higher, which has kept the US dollar slightly bid.

Recent USD direction has been driven by shifting Fed expectations. Since the October 28 decision, a 10-2 vote with two dissenters seeking a 25bp hike, rate expectations have moved higher after the payrolls and CPI releases.

Futures price a 25bp hike in December, and some speculate on 50bp.

The bigger shift in rate expectations is in mid-2027, where LSEG’s IRPR currently indicates 75bp of Fed tightening as early as September 2027. That has prompted traders to reload USD longs, which had fallen nearly 29% from late-July highs . Volatility in AI and tech stocks, including Nvidia’s security and leadership issues, is adding to USD demand on a haven basis.

Sterling’s drubbing may be reaching oversold status. Oil has fallen more than 20% since October 26, which should eventually pull inflation lower, if Middle East tensions stay contained. Further, inflation is not a US-specific problem, and developed-market policy paths are converging, which argues against an outsized move in any single currency if rate expectations hold.

Technically, GBP/USD has support at the October 16 and 28 lows of 1.3268 and 1.3274. A break below 1.3268 opens a test of 1.3137, the October 14 low tied to French fiscal concerns. Bulls need to clear 1.3389, the 50% Fibonacci retracement of 1.3503-1.3276, to regain momentum.
GBP$ Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

MUFG Research discusses the Fed rates and EUR/USD outlook.

"We remain sceptical of the need to hike by 50bps at this stage and suspect the majority will see the better risk-reward in going by 25bps. We still have another payrolls report (but no further CPI prints, although it’s the day after) before the FOMC meeting and a strong print plus a rebound in crude oil after the recent sharp drop would be one scenario of a possible more aggressive hike. It’s a scenario that might add to the reasons for President Trump to push for a deal with Iran to reopen the Strait of Hormuz and end the conflict," MUFG notes.

"It’s still more a risk than a core view but it would alter the current balanced expectations in the markets across key central banks and shift rate hike expectations much more in favour of the dollar that would likely prompt a further lurch lower in EUR/USD and bring levels below the 1.1000-level into play," MUFG adds.

MUFG targets EUR/USD at 1.12 by year-end.

• EUR/USD traders get a signal to sell

• Scope for 1.0873 after break below 1.1105

• 1.1105 is mid-point 1.0125-1.2084 rise

• 1.0883 is 61.8% of the 1.1025-1.2084 rally

• Drop stretched below base 20 day/month Bollingers

• The Big EUR/USD short is increasingly hard to justify

• FX traders should consider implications of lower oil

•
EURUSD monthly chart

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