USD climbs as euro, yen weaken
The US dollar surged to its highest level since August as both the euro and yen dropped following rate holds from the European Central Bank and Bank of Japan.
EUR/USD hit two-month lows after the ECB held rates for a third straight meeting. AUD/EUR approached four-month highs.
The greenback’s strength weighed on AUD/USD, which fell 0.3%, while NZD/USD lost 0.4% despite a positive meeting between President Trump and President Xi Jinping.
The USD index reached its highest level since 1 August, supported in Asia by a 0.9% jump in USD/JPY. USD/CNH rose 0.2%, and USD/SGD gained 0.3%.
BoJ holds, but hawkish voices emerge
The Bank of Japan kept its benchmark rate at 0.5%, as expected. The vote split 7–2, with Takata and Tamura advocating a hike to 0.75%. Takata said the inflation target had been met, while Tamura argued for a move toward neutral rates.
The BoJ signaled openness to future hikes if economic and price trends support it, but cautioned against premature conclusions. It maintained its inflation outlook, projecting core CPI at 2.7% in 2025, 1.8% in 2026, and 2.0% in 2027. Growth forecasts edged up for 2025 to 0.7%, while 2026 and 2027 held at 0.7% and 1.0%.
Policymakers flagged persistent uncertainty, especially around global trade. Traders now see a 45% chance of a December rate hike.
In USD/JPY, dollar buyers may eye support near 151.41 (21-day average), with the next level around 149.92 (50-day average).
The yen weakened across other markets, with AUD/JPY hitting one-year highs, NZD/JPY nearing 2025 highs, and SGD/JPY reaching 18-month highs.
Trump cuts fentanyl tariffs after Xi meeting
President Trump announced an immediate cut in fentanyl-related tariffs to 10%, down from 20%, following what he called an “amazing” meeting with President Xi in South Korea. He said a US-China trade deal could be signed soon.
China will resume soybean purchases and suspend its rare-earths licensing regime for at least a year. “There’s no roadblock at all on rare earths,” Trump said. “That will hopefully disappear from our vocabulary for a little while.”
In Asia FX, dollar buyers may find opportunity in USD/SGD at key support levels: 1.2950 (21-day average), followed by 1.2925 (100-day average).
Euro, yen hit
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 – 31 October
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
