Europe Summary and Highlights 26 November
The USD was generally stronger through the European morning, reversing some of the overnight losses in Asia.
European morning session
The USD was generally stronger through the European morning, reversing some of the overnight losses in Asia. EUR/USD dropped 15 pips to 1.1575, while USD/JPY gained 20 pips to 156.40. There were similar USD gains across the board with not much movement on the crosses. However, the scandis were both a little weaker, with EUR/NOK and EUR/SEK both a couple of figures higher. NOK declines may have related in part to slightly weaker than expected mainland GDP data, which showed a 0.1% q/q rise in Q3 against 0.2% expected.
Asia session
The RBNZ has cut its cash rate by 25bp as per forecast. The RBNZ cut its cash rate by 25bp to 2.25% in the November meeting and signal there will be no more rate cut. The RBNZ downplayed the spike of Q3 CPI by transitory factors and expect inflationary pressure to ease back towards mid point of target range in 2026. The OCR forecast is seeing no more rate cut from the current 2.25% and first rate hike in late 2026, a pace slightly sharper than August OCR forecast. The reason for RBNZ's 25bps cut seems to be slow economic recovery from U.S. tariffs and geopolitical uncertainty. Market participants seize the opportunity to bid the Kiwi and send NZD/USD 1.24% higher at 0.5689. AUD/USD is trading 0.55% higher on red hot 3.8% y/y monthly CPI for October while USD/CAD slides 0.18%.
The wind begun to blow as more BoJ members signal their support for a December hike. Apart from persistent JPY weakness, the meeting between Ueda and Takaichi seems to have cleared the political obstruction for the BoJ. USD/JPY rises 0.1% to 156.19 as the broad upbeat risk atmosphere has weaken the demand for haven JPY. Else, EUR/USD and GBP/USD is up 0.18%.