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Minutes from the BoJ’s September policy meeting revealed a deeply divided board, with members debating the pace and timing of future rate hikes. The nine-member board voted to keep the policy rate steady at 0.5%, rejecting calls by two hawkish members who wanted to raise borrowing costs to 0.75%. The discussion centered on balancing the downside risks to growth against persistent inflationary pressures, particularly from elevated food prices.

Some members argued for moving sooner rather than later. One hawkish participant called for raising rates at “somewhat regular intervals”, citing an improving flow of data, including corporate earnings and the Tankan business survey, as valuable indicators to guide normalization. Another member warned that the cost of waiting too long to tighten policy was “gradually increasing,” even if it would allow the BoJ to gain more clarity on the global outlook, especially from the U.S.

However, the majority on agreed it was better to wait for “a little more hard data” before considering another move. They noted that while conditions for tightening were gradually being met, acting now could “surprise the market” and risk destabilizing financial conditions. Some emphasized that as long as inflation expectations remain insufficiently anchored, maintaining accommodative conditions was appropriate to support Japan’s recovery.

Another member highlighted uncertainty surrounding the U.S. slowdown as a key reason to stay cautious, but conceded that, based purely on domestic fundamentals, Japan might soon meet the conditions for another hike.

Full BoJ September minutes here.

China’s service sector expansion eased slightly in October, with the RatingDog PMI Services slipping from 52.9 to 52.6, in line with expectations. Composite PMI also moderated to 51.8 from 52.5. While domestic demand improved, weakness in overseas orders capped momentum, reflecting the impact of renewed global trade instability on China’s external-facing industries.

RatingDog founder Yao Yu said new export business “fell noticeably into contractionary territory” amid "increased instability in the global trade environment". However, total new orders still expanded as domestic demand strengthened. Business expectations remained high even though confidence edged slightly lower. Employment stayed in contraction, but the pace of job losses eased.

Price pressures were uneven. Input costs rose for an eighth consecutive month, reaching their highest level since October 2024. On the other hand, output prices slipped back into contraction, implying margin compression for service providers.

Full China RatingDog PMI services release here.

New Zealand’s labor market showed further signs of softening in the Q3, with total employment flat at 0.0% qoq, missing expectations for a small 0.1% qoq rise. On an annual basis, employment fell -0.6% yoy.

Unemployment rate ticked up from 5.2% to 5.3%, in line with forecasts, extending a full year of readings above 5%. The last time joblessness reached this level was in late 2016. Labor-force participation rate slipped 0.2 ppt to 70.3%, suggesting some workers are leaving the active job market.

Wage growth also cooled, with all-sector earnings up 0.4% qoq and 2.1% yoy, indicating reduced pressure on labor costs.

Full NZ employment release here.

The unemployment rate rose to 5.3% in the September quarter, as expected. Employment was flat and more people exited the labour force, but there was an encouraging lift in hours worked.

• Unemployment rate: 5.3% (prev: 5.2%, Westpac: 5.3%, RBNZ: 5.3%, mkt: 5.3%)
• Employment change: 0.0% (prev: -0.2%, Westpac: 0.0%, RBNZ: 0.0%, mkt: +0.1%)
• Participation rate: 70.3% (prev: 70.5%, Westpac: 70.4%, RBNZ: 70.4%, mkt: 70.5%)
• Labour costs (private sector): +0.4% (prev: +0.6%, Westpac: +0.5%, RBNZ: +0.4%, mkt: +0.4%)

The September quarter labour market surveys were generally as subdued as we were expecting. The unemployment rate ticked up from 5.2% to 5.3%, its highest level since 2016. There was a similar rise in the broader underutilisation measure from 12.8% to 12.9%.

The number of people employed was flat for the quarter, broadly matching the signal from the Monthly Employment Indicator (noting that the MEI has picked up in the last two months but tends to be overstated on its initial release). With the working-age population growing by 0.3% over the quarter, this was absorbed through a combination of higher unemployment and lower participation. The participation rate fell from 70.5% to 70.3% – a slightly larger fall than we had assumed – and appears to have been spread across age groups.

One unexpected but encouraging result was a 0.9% rise in hours worked in the Household Labour Force Survey – the first quarterly increase since December 2023. The HLFS measure can be volatile and not necessarily a good indicator for quarterly GDP, but in this case it was backed by a rise in the jobs and hours measures in the Quarterly Employment Survey as well. Average hours worked had fallen markedly over the last year or so, implying that employers were adjusting to the soft economy by reducing hours rather than laying off workers; the latest quarterly result suggests that this trend is reversing (or was perhaps overstated in the first place).

Given the degree of slack in the labour market, wage trends were unsurprisingly subdued. The Labour Cost Index for all sectors rose by 0.4% for the quarter, a little below our estimate but in line with market and RBNZ forecasts. Public sector wages rose 0.6% (driven more by local than central government), while private sector wages were up 0.4%.

The unadjusted analytical LCI, which includes pay increases that are related to higher productivity, rose by 0.7% for the quarter. The annual growth rate slowed from 3.6% to 3.4%, its lowest since June 2021. The distribution of pay increases also continued to soften: 44% of roles saw no increase in the past year, the highest share since June 2021. For those roles that did see pay rises, the average size of the increase is converging on the 2-3% range.

The September quarter results were almost entirely in line with the RBNZ’s forecasts, offering little for markets to chew on ahead of the 26 November Monetary Policy Statement. There are some early signs of the economy stabilising, but the existing degree of spare capacity will give the RBNZ confidence that inflation will moderate back towards the 2% target midpoint next year. We continue to expect a 25bp cut in November.

Trading at 1.30244, a level last seen in early April, GBP/USD has fallen 0.87% in today’s session alone.

Continuing a period of bearish momentum, cable is now on pace for its worst two-weekly performance since November 2024, with four days to spare until the candle closes.

Recently breaking through previously held support and the 200-day SMA, one has to ask:

What’s next for GBP/USD?

GBP/USD: Key takeaways 30/10/2025

• With today’s session signifying the worst GBP/USD performance in over 140 calendar days, price action has convincingly broken previously held support at 1.31403, and the 200-day SMA at 1.31011
• Writing ahead of the Bank of England’s Thursday decision, Governor Andrew Bailey is in a difficult position, faced with rising inflation, which would support higher rates, alongside rising unemployment and weak economic growth, which would support lower rates
• Otherwise, and with the dust beginning to settle on last week’s Federal Reserve rate decision, a hawkish tone from Powell to suggest a shallower easing cycle has added a significant tailwind to falling cable pricing

GBP/USD: All eyes on sterling

It would only make sense that, considering monetary policy matters scheduled for later this week, much of the market has the pound sterling in its focus.

It is fair to say, however, that this newfound focus comes at an inopportune time for GBP/USD, between warnings of “hard choices” in the upcoming Autumn budget by Chancellor Rachel Reeves, and a central bank stuck between a rock and a hard place in their upcoming decision.

As a a result, GBP currently underperforms its currency peers by some margin.

"It is my job to deal with the world as we find it, not the world that I might wish it to be"

Rachel Reeves, Chancellor of the Exchequer, speaking at Number 10 Downing Street, 04/11/2025

GBP/USD: Fundamental Analysis 04/11/2025

Fiscal health of UK remains in question: At risk of repeating myself from previous coverage, questions around sovereign debt and government borrowing costs continue to reign supreme in GBP/USD markets.

Speaking today at Number 10 in a rare pre-budget speech, Rachel Reeves addressed speculation about her upcoming Autumn budget, tasked with plugging an estimated £22bn hole in public finances, compounded by falling UK productivity.

Rachel Reeves fails to rule out breaking manifesto pledges on tax in major speech

Blaming previous governments, Reeves crucially did not rule out rises to income tax, national insurance, or VAT, despite campaign pledges not to raise taxes on working people

Tying this back to GBP/USD, the current narrative surrounding sovereign debt in the UK is weighing harshly on sterling, and despite somewhat questionable government spending in the US, markets are voting with their feet and selling the British pound in favour of other, seemingly more stable stores of wealth.

Increased rate cut bets ahead of BoE meeting: To be clear, the majority of markets still predict that the Bank of England will vote to maintain rates at 4.00% in its decision later this week.

Although when considering October’s CPI numbers reported inflation unchanged MoM at 3.8%, and that unemployment and GDP data still leaves much to be desired, it would be wrong not to acknowledge a school of thought to cut rates by 25 basis points.

In the unlikely event that the Bank of England does choose to cut, however, we can expect this to weigh heavily on sterling pricing in two ways:

1. In a vacuum, lower interest rates are currency negative
2. Within the context that a cut would surprise markets, and considering current sovereign debt, jobs market, and GDP data, the cut would likely be seen as an emergency response by the BoE, hurting investor confidence

Although it is a firmly minority view, it would be fair to say that rate cut bets are increasing somewhat ahead of Thursday, which is adding to the cable downside.

Bringing this discussion back to earth, inflation remains almost twice the target in the UK, at 3.8%, which would make rate cuts hard to justify unless Governor Bailey can reasonably suggest that current inflation is in some way temporary and will resolve itself.

GBP/USD: Technical Analysis 04/11/2025

GBP/USD: Daily (D1) chart analysis:

GBP/USD, D1, OANDA, TradingView, 04/11/2025

I’m pleased to say both price targets set in my previous commentary have been met, with GBP/USD sliding lower as predicted.

Failing to find support at the 200-day SMA or the triple bottom-lows as highlighted, bearish momentum continued, and for now, looks set to continue.
Price targets and support/resistance levels:

• Price target/Resistance #1 - $1.30000 - Key psychological level
• Price target/Resistance #2 - $1.28847 - Lower boundary of previous range

While it seems remiss to suggest any evidence of GBP bulls after today, price action may stage some kind of recovery at each price target/area of resistance, especially considering the 14-day RSI rates current price action as ‘oversold’ for the first time since January.

Gold prices saw a sharp decline in the US session today with the precious metal down around 1.5%. Gold tested the $4000/oz in the European session but failed to break higher as the rally ran out of steam.

The current resurgence in the US dollar which accelerated following a hawkish recalibration of market expectations regarding the Federal Reserve’s (Fed) monetary policy has played a big part in the precious metals struggles.

Fundamental Catalysts: The Fed Repricing Shock and USD Strength

After last week's Fed meeting, officials made it clear they are less likely to cut rates soon. The market's confidence in a rate cut this December quickly fell from 94% to about 70%.

This expectation of higher-for-longer interest rates makes it more expensive to hold gold, which doesn't pay interest, compared to holding the interest-earning US dollar, pushing the gold price (XAU/USD) down. Key Fed leaders have also confirmed this view; some said inflation is still too high and they're ready to raise rates if needed, while another expressed concern about cutting too soon.

These signals strengthen the US dollar, which is hurting gold. If the US Dollar Index (DXY) keeps rising strongly above the 100 mark, it would be a major sign that dollar strength is here to stay, likely causing precious metals prices to drop significantly.

Adding a small, secondary pressure, a new tax policy in China that removes some exemptions on gold purchases is expected to temporarily reduce how much gold Chinese consumers buy.

US Government Shutdown Continues

The recent Fed rhetoric suggests a greater dependency on data moving forward. This is of course inconvenient given the ongoing US government shutdown which is disrupting the normal release of economic reports, which means we have less information than usual.

Because of this limited data, the few reports that do come out, especially tomorrow's job report from ADP, will likely have a much bigger impact on the markets than they normally would. The overall lack of data may also lead to periods where currency trading lacks a clear direction.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Technical Analysis - Gold (XAU/USD)

From a technical standpoint, Gold needs a four-hour candle close below the 3924 handle for a new lower low to be printed.

The current highest-probability trend is a continued decline toward the 3782 to 3797 target range, contingent upon Gold remaining beneath the 4000 psychological level.

For the bullish bias to be revived in the near term, XAU/USD must achieve a four-hour candle close above the 4000 psychological level and the 50-day MA at around the 4012 handle.

Until such a reversal is confirmed, pressure will persist. It is important to note that while the intermediate trend is negative, the long-term uptrend remains underpinned by the 50-day and 100-day MA on the daily timeframe, which rests at 3844 and 3595 respectively.

Gold (XAU/USD) Four-Hour Chart, November 4, 2025

Source: TradingView (click to enlarge)

AUDJPY: ⬇️ Sell

• AUDJPY reversed from key resistance level 101.00
• Likely to fall to support level 99.00

AUDJPY currency pair recently reversed from the resistance zone between the key resistance level 101.00 (which stopped the previous minor impulse wave 1 at the start of October) and the upper daily Bollinger Band.

The downward reversal from this resistance area created the daily Japanese candlesticks reversal pattern Evening Star Doji – which stopped the previous impulse waves 3 and (3).

Given the strength of the resistance level 101.00 and the overbought daily Stochastic indicator, AUDJPY currency pair can be expected to fall to the next support level 99.00.

EURAUD: ⬆️ Buy

• EURAUD reversed from support level 1.7600
• Likely to rise to resistance level 1.8085

EURAUD currency pair recently reversed from the support zone between the support level 1.7600 (lower border of the narrow sideways price range inside which the pair has been trading from June) and the lower daily Bollinger Band.

The upward reversal from this support area stopped the previous short-term impulse wave A.

Given the strength of the support level 1.7600 and the bullish euro sentiment seen today across the FX markets, EURAUD currency pair can be expected to rise to the next resistance level 1.8085 (upper border of the active sideways price range).

EURNZD: ⬆️ Buy

• EURNZD reversed from support area
• Likely to rise to resistance level 2.0430

EURNZD currency pair recently reversed from the support area between the key support level 2.0000, support trendline of the daily up channel from June and the lower daily Bollinger Band.

The upward reversal from this support area stopped the previous short-term ABC correction 2.

Given the predominant daily uptrend, EURNZD currency pair can be expected to rise to the next resistance level 2.0430, which stopped the previous minor impulse wave 1 in the middle of October.