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A collection of good and bad news affecting the foreign exchange market
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The moon waxes and wanes, people have joys and sorrows, life changes, and the year has four seasons. If you survive the long night, you can see the dawn, if you endure the pain, you can have happiness, if you endure the cold winter, you no longer need to hibernate, and after the cold plums have fallen, you can look forward to the new year.
Hello everyone, today XM Forex will bring you "[XM Official Website]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On November 20, 2025, the long-short game in the foreign exchange market intensified. The US dollar index fluctuated and stabilized after breaking through the 100 mark, and non-US currencies showed a trend of differentiation. Trading on the day needs to focus on the Fed's policy clues, European and British economic data and emerging market trends. The following is a summary of the core news affecting the market from the two dimensions of good and bad, and provides a reference for trading decisions.
1. Good news: the core driving force supporting non-US currencies and safe-haven currencies
(1) Euro zone economic data has picked up, and the ECB’s hawkish expectations have increased
Euro zone 11 The preliminary value of the monthly manufacturing PMI was recorded at 47.8, a significant rebound from October's 46.5, the highest level in three months. The German manufacturing PMI rose from 42.8 to 44.2, breaking the six-month decline trend. At the same time, the Eurozone's core CPI rose by 2.7% year-on-year in October. Although it fell slightly from the previous value, it was still higher than the European Central Bank's 2% target. Market expectations for a premature interest rate cut by the European Central Bank have further cooled. ECB Governing Council member Nott stated that "the current interest rate level needs to be maintained until the second quarter of 2026." The hawkish remarks provided support for the euro, and the euro formed an effective support against the US dollar near 1.1570.
(2) The resilience of the British job market exceeds expectations, and the pound is supported by fundamentals
The British unemployment rate remained at a low of 3.8% in October, and the average weekly wage increased by 6.2% year-on-year, a significant increase from 5.8% in September, indicating that the job market is still resilient. The acceleration in wage growth has eased market concerns about a recession in the UK and also strengthened expectations that the Bank of England will keep interest rates stable. Previously, the Bank of England deleted the policy guidance at its November interest rate meeting."cautious" statement, the current market forecast probability of an interest rate cut in December has dropped from 50% to 35%, and the support for GBP/USD around 1.3120 has significantly increased.
(3) Geographical risk margins are heating up, and the Japanese yen’s safe-haven attribute is highlighted
New disturbances have emerged in the situation in the Middle East. The multinational coalition led by Saudi Arabia launched air strikes on Houthi armed targets in Yemen on November 19, resulting in increased shipping security risks in the Red Sea. At the same time, officials from the Japanese Ministry of Finance once again released a signal of exchange rate intervention, saying that they "will pay close attention to the trend of the Japanese yen exchange rate and remain highly vigilant against excessive fluctuations." Double factors have boosted the demand for safe havens in the Japanese yen. The US dollar against the Japanese yen has fallen from a high of 155.80 to around 154.90, and the Japanese yen has also risen to varying degrees against other major currencies.
2. Bad news: key variables that suppress market sentiment
(1) The Federal Reserve released intensive hawkish remarks and the U.S. dollar index climbed strongly
Many senior officials of the Federal Reserve issued hawkish speeches on November 19. Dallas Fed President Logan made it clear that "it is too early to cut interest rates in December, and the process of inflation falling back to 2% will still be repeated." Atlanta Fed President Bostic also mentioned that "the current policy interest rate has not yet reached a restrictive peak." Affected by this, CME's "Fed Watch" tool showed that the probability of an interest rate cut in December dropped sharply from 44% to 32%. The U.S. dollar index broke through the 100 integer mark, reaching a maximum of 100.32, a new high in a month, forming a xmtraders.comprehensive suppression of non-U.S. currencies.
(2) The Reserve Bank of Australia released a easing signal, and the Australian dollar was under pressure to weaken
The minutes of the November meeting of the Reserve Bank of Australia showed that members discussed the issue of "whether further interest rate cuts are needed to boost the economy" and believed that "the slowdown in domestic consumption growth and the cooling of the real estate market have constituted a drag on economic growth." At the same time, Australian retail sales fell by 0.4% month-on-month in October, lower than the expected growth of 0.2%, confirming the weakness on the consumer side. The market predicts that the Reserve Bank of Australia may start cutting interest rates in February 2026. The Australian dollar continues to decline against the US dollar. As of the morning of November 20, it has fallen to 0.6470, a new low in two weeks.
(3) The pressure of capital outflows from emerging markets has emerged, and some currencies are under pressure
Affected by the strength of the US dollar and the fall in global risk appetite, the pressure of capital outflows from emerging markets has intensified. On November 19, the Indian rupee fell to a historical low of 84.50 against the US dollar, and the Indian central bank was forced to sell approximately US$2 billion in foreign exchange reserves to stabilize the exchange rate; the Turkish lira also fell by 1.2% against the US dollar, to around 38.20, a new low in three months. In addition, the currencies of Latin American countries such as Brazil and Mexico have depreciated to varying degrees, mainly because investors have turned their funds to U.S. dollar assets for safe haven.
3. Core tips for trading
Trading on the day should focus on the U.S. October core PCE price index released at 20:30 in the evening. This data is the core reference indicator for the Federal Reserve’s monetary policy. If it is higher than expected, the dollar may rise further; if it is lower thanIt is expected that non-US currencies are expected to rebound. In terms of operation, the EURUSD can focus on the 1.1560-1.1600 range, and the GBP/USD focuses on the support and resistance of 1.3100-1.3160. The USD/JPY needs to be alert to the risk of intervention by the Bank of Japan. It is recommended to set strict stop losses to avoid blind pursuit of orders. At the same time, it is necessary to track the geopolitical situation in the Middle East and the speeches of Federal Reserve officials in real time to guard against short-term fluctuations caused by unexpected news.
The above content is all about "[XM official website]: Collection of good and bad news affecting the foreign exchange market". It is carefully xmtraders.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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