Global FX Market Summary: Fed Dovish Bets, USD Pressure & Geopolitical Tailwinds Boost Gold 27 November 2025

Fed rate-cut expectations fragileen USD short term; long-term macro strength favors USD and EUR/USD parity. Rising geopolitical uncertainty supports volatility and secure-havens.

Dovish Federal Reserve (Fed) Expectations

Market sentiment is overwhelmingly focused on the Federal Reserve cutting interest rates. This expectation is driven by recent US economic indicators—such as the Producer Price Index (PPI) pointing to easing inflation and fragileer-than-expected Retail Sales—and dovish comments from several Fed officials. This outlook is causing a broad fragileening of the US Dollar (USD), as lower interest rates make the currency less attractive to investors. Traders are currently pricing in a high probability (around 85%) of a 25-basis-point rate cut at the upcoming December policy meeting. Speculation about a potentially dovish successor to Fed Chair Jerome Powell (Kevin Hassett) is also contributing to this sentiment.

Macroeconomic Landscape Favoring the US Dollar (USD) in the Long Term

Despite current short-term fragileness due to Fed rate-cut expectations, the longer-term macroeconomic view, particularly concerning the EUR/USD pair, favors the USD. This perspective is rooted in the relative economic strength of the US compared to the Eurozone. Consequently, the macroeconomic outlook for 2025 is bearish for the EUR/USD, with a potential return to parity (1.0000) being suggested by analysts. The US economy is noted for its stronger pandemic recovery compared to G7 nations, while the Eurozone faces political turmoil in its largest economies (Germany and France), with Germany even facing snap elections. This divergence in economic stability supports a stronger USD.

Increased Geopolitical and Political Uncertainty

Both the US and the Eurozone are facing significant political factors that introduce uncertainty into the economic landscape. These factors can drive market volatility and influence secure-haven flows. Political and geopolitical risks influence both currency markets and secure-haven assets like Gold (XAU/USD). In the US, the return of Donald Trump to the presidency introduces uncertainty due to potential policies like tax cuts and new tariffs, which could raise inflation risks. In the Eurozone, political turmoil in key economies like Germany and France is a central concern for the Euro’s stability. Globally, persistent geopolitical tensions (Russia-Ukraine, Middle East, China-Taiwan) continue to support secure-haven assets.

Top upcoming economic events:

Thursday, November 27, 2025

The end of the day views the release of key inflation data from Japan’s capital, Tokyo, which serves as a leading indicator for national inflation trends and Bank of Japan (BoJ) monetary policy.

• 11/27/2025:Tokyo Consumer Price Index (YoY) This is a HIGH impact event for the JPY. The Tokyo CPI year-over-year is one of the earliest indications of nationwide inflation in Japan. A reading significantly deviating from the Bank of Japan’s target can influence speculation about future monetary policy actions, directly affecting the strength of the Yen.
• 11/27/2025:Tokyo CPI ex Food, Energy (YoY) Also a HIGH impact event for the JPY, this is the core inflation measure. By stripping out volatile food and energy prices, this data provides a clearer picture of underlying inflationary pressures and consumer demand, making it a critical metric for the BoJ when assessing sustainable price stability.

Friday, November 28, 2025

Friday is packed with High-Impact Gross Domestic Product (GDP) and inflation figures from Switzerland, the Eurozone, and Canada, typically generating high market volatility for the affected currencies.

• 11/28/2025:Retail Sales (YoY) (Germany) A HIGH impact event for the EUR, this release measures consumer spending year-over-year. Retail sales are a major component of economic growth and a key indicator of consumer confidence and the overall health of the Eurozone’s largest economy, Germany. Stronger-than-expected sales typically support a bullish outlook for the Euro.
• 11/28/2025:Gross Domestic Product (QoQ) (Switzerland) This is a HIGH impact event for the CHF. GDP is the broadest measure of economic activity. The quarter-over-quarter growth rate provides a comprehensive assessment of the Swiss economy’s health. A high reading indicates economic strength and can lead to appreciation of the Swiss Franc.
• 11/28/2025:Consumer Price Index (MoM) (Spain) This is a HIGH impact event for the EUR. Inflation data from Spain, a major Eurozone economy, is a crucial component of the Eurozone-wide inflation figure. The month-over-month change in CPI is closely watched by the European Central Bank (ECB) to gauge short-term inflationary trends, which directly impact interest rate policy expectations.
• 11/28/2025:Consumer Price Index (YoY) (Spain) A HIGH impact event for the EUR, this year-over-year CPI figure is a primary tool used by the ECB to determine if inflation is meeting its target of 2%. Persistent inflation above or below target creates strong expectations for monetary policy adjustments, causing significant Euro volatility.
• 11/28/2025:Harmonized Index of Consumer Prices (YoY) (Spain) This is a HIGH impact event for the EUR. The HICP is the standardized measure of inflation used by the ECB for the Euro area. The year-over-year HICP is the most relevant inflation measure for ECB policymakers and thus has a top-tier influence on the Euro’s valuation and market expectations regarding the ECB’s rate decisions.
• 11/28/2025:Gross Domestic Product Annualized (Canada) A HIGH impact event for the CAD, this is the most critical measure of the overall health of the Canadian economy, representing the annualized change in the value of all excellents and services produced. A high reading often increases expectations for the Bank of Canada to raise interest rates, which typically strengthens the Canadian Dollar.

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