Global markets open the day with the dollar little changed from Friday as investors look ahead to an expected Fed rate cut on Wednesday, even as a broader shift in central bank thinking begins to take hold. A growing view that easing cycles may be ending has supported currencies such as the Australian and Canadian dollars. In Europe, ECB officials struck a cautiously optimistic tone, with Schnabel signalling comfort with market pricing for an eventual hike even as others stressed that rates are unlikely to move soon.
Eurozone data surprised modestly to the upside with stronger German industrial production and improved investor confidence. In Japan, weak Q3 GDP reinforced pressure on the yen and deepened scepticism that limited BOJ tightening will be sufficient.
Geopolitically, attention is on Europe as President Zelensky meets key leaders in London amid tensions over proposed peace terms, alongside fresh strains between China and Japan following aerial encounters near Okinawa.
In the US, the calendar is light with focus on the New York Fed’s one-year inflation expectation and comments from ECB and Bank of England officials.
Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
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