30 October 2025

The Governing Council today decided to keep the three key ECB interest rates unchanged. Inflation remains close to the 2% medium-term target and the Governing Council’s assessment of the inflation outlook is broadly unchanged. The economy has continued to grow despite the challenging global environment. The robust labour market, solid private sector balance sheets and the Governing Council’s past interest rate cuts remain important sources of resilience. However, the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions.

The Governing Council is determined to ensure that inflation stabilises at its 2% target in the medium term. It will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission. The Governing Council is not pre-committing to a particular rate path.

Key ECB interest rates

The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will remain unchanged at 2.00%, 2.15% and 2.40% respectively.

Asset purchase programme (APP) and pandemic emergency purchase programme (PEPP)

The APP and PEPP portfolios are declining at a measured and predictable pace, as the Eurosystem no longer reinvests the principal payments from maturing securities.

***

The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises at its 2% target in the medium term and to preserve the smooth functioning of monetary policy transmission. Moreover, the Transmission Protection Instrument is available to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across all euro area countries, thus allowing the Governing Council to more effectively deliver on its price stability mandate.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:45 CET today.

Daily Pivots: (S1) 151.83; (P) 152.45; (R1) 153.35; More...

Dollar's strong break of 153.26 confirms resumption of whole rise from 139.87. Intraday bias is back on the upside for 100% projection of 146.58 to 153.26 from 149.37 at 156.05. Firm break there will target 158.86 resistance next. On the downside, below 153.24 resistance turned support will turn intraday bias neutral first. But outlook will stay bullish as long as 151.52 support holds, in case of retreat.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Dollar extended its rebound as North American trading got underway, gaining further momentum following Wednesday’s hawkish Fed rate cut. The greenback’s strength came as markets continued to digest the Fed’s divided decision and Chair Jerome Powell’s pushback against expectations for another cut in December.

U.S. Treasury yields also climbed, with the 10-year yield breaking above 4.1% and appearing poised to extend its near-term rebound. The move reflects a market reassessment of the Fed’s trajectory after Powell emphasized that future easing is “not a foregone conclusion.” As a result, the probability of a December rate cut has slipped to 68.8%, down sharply from around 90% at the start of the week.

Still, the broader policy debate remains nuanced. The Fed’s latest Summary of Economic Projections places the neutral rate—the level neither stimulating nor restricting the economy—within a 2.8% to 3.5% range. With the current policy rate at 3.75–4.00%, the stance is still modestly restrictive, but not overly tight. Some policymakers may still see room to bring rates slightly closer to neutral as a form of insurance, particularly given the data blackout caused by the ongoing government shutdown.

For now, Dollar is the day’s top performer, followed by Swiss Franc and Euro, which is trading cautiously ahead of the ECB decision. The euro remains steady, with investors expecting the central bank to hold its deposit rate at 2.00% and maintain a neutral tone, signaling comfort with current policy settings.

At the other end of the spectrum, Yen is under heavy pressure, with selling resuming after the BoJ’s uneventful policy hold. Aussie and Kiwi also softened, reflecting a cooling of risk-on sentiment following earlier optimism over the Trump–Xi trade deal. Elsewhere, Sterling and Loonie are trading mid-pack.

On the trade front, China’s Commerce Ministry said it will cooperate with the U.S. to “properly resolve” issues surrounding TikTok’s U.S. operations. But there is not timeline nor details provided. TikTok will likely remain a sticky issue despite the progress in de-escalation trade tension with the Trump–Xi summit in South Korea.

In Europe, at the time of writing, FTSE is down -0.61%. DAX is down -0.15%. CAC is down -0.91%. UK 10-year yield is up 0.005 at 4.445. Germany 10-year yield is up 0.032 at 2.657. Earlier in Asia, Nikkei rose 0.04%. Hong Kong HSI fell -0.24%. China Shanghai SSE fell -0.73%. Singapore Strait Times fell -0.06%. Japan 10-year JGB yield fell -0.007 to 1.647.

Eurozone GDP beats expectations with 0.2% growth in Q3

The Eurozone economy expanded by 0.2% qoq in Q3, outpacing expectations of a 0.1% increase. EU GDP rose 0.3% qoq, marking a modest but welcome pickup in growth momentum. Compared with the same period last year, seasonally adjusted GDP grew 1.3% yoy in the Eurozone and 1.5% across the EU.

Among member states, performance was uneven but generally positive. Sweden led the bloc with a robust 1.1% quarterly increase, followed by Portugal (+0.8%) and Czechia (+0.7%). In contrast, Lithuania (-0.2%), Ireland, and Finland (both -0.1%) saw mild contractions. The data show that 14 countries posted positive year-on-year growth, with only one economy contracting.

Swiss KOF climbs to 101.3, outlook brightens

Switzerland’s KOF Economic Barometer rose more than expected in October, advancing from 98.0 to 101.3 against forecasts of 99.0. The index’s move above the 100-threshold suggests that short-term prospects are now slightly above the long-term average, hinting at a firmer growth backdrop heading into year-end.

The KOF Institute noted that most indicator groups contributed positively to the uptick. In particular, manufacturing, financial and insurance services, and other service industries all displayed a more favorable outlook. However, the report pointed out a setback in private consumption, underscoring that household spending remains a relative weak spot even as business sentiment strengthens.

BoJ holds at 0.50%, keeps gradual tightening bias intact

The BoJ left its overnight call rate unchanged at 0.50% as widely expected. The decision came by a 7–2 vote, with Hajime Takata and Naoki Tamura again dissenting in favor of a 25bps rate hike to move policy a little closer to neutral. The repeat split highlights the growing divergence within the board as policymakers debate how quickly to normalize monetary conditions.

In its quarterly Outlook Report, the BoJ made only marginal revisions to its forecasts, signaling that the economic and inflation outlook remains broadly stable. The bank raised its fiscal 2025 GDP forecast slightly from 0.6% to 0.7%, while projections for 2026 and 2027 were left unchanged at 0.7% and 1.0%, respectively.

On prices, the BoJ kept its core CPI forecast at 2.7% for 2025, 1.8% for 2026, and 2.0% for 2027. Core-core CPI (excluding both fresh food and energy) was nudged higher to 2.0% in 2026 from 1.9%, with other years unchanged (2026 at 2.8% and 2027 at 2.0%). The bank reiterated that underlying inflation is expected to reach 2% in the latter half of the projection period through March 2027, retaining language from July that risks to the inflation outlook remain “roughly balanced.”

The BoJ also reiterated that it would continue to raise its policy rate and adjust the degree of monetary support “in accordance with improvements in the economy and prices.”

New Zealand ANZ business confidence surges to seven-month high, green shoots emerging

New Zealand’s ANZ Business Confidence Index surged sharply in September, rising from 49.6 to 58.1, the highest level since February. Own Activity Outlook also improved modestly, up from 43.4 to 44.6, marking its strongest reading since April.

Inflation expectations, meanwhile, remained broadly steady. The share of firms expecting to raise prices over the next three months eased slightly from 46% to 44%. Those anticipating cost increases ticked up from 75% to 76%. One-year-ahead inflation expectations edged higher from 2.71% to 2.75%.

ANZ noted that “green shoots are emerging, particularly for interest-rate-sensitive sectors.” The bank highlighted stronger retail sentiment as evidence that the economy is beginning to warm alongside the spring season, with monetary easing and high rural incomes supporting regional confidence and broader recovery momentum.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 151.83; (P) 152.45; (R1) 153.35; More...

Dollar's strong break of 153.26 confirms resumption of whole rise from 139.87. Intraday bias is back on the upside for 100% projection of 146.58 to 153.26 from 149.37 at 156.05. Firm break there will target 158.86 resistance next. On the downside, below 153.24 resistance turned support will turn intraday bias neutral first. But outlook will stay bullish as long as 151.52 support holds, in case of retreat.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Falling under 1.32000 yesterday, GBP/USD currently trades 1.3176, down -0.13%.

Succumbing to selling pressure, yesterday’s session goes on record as cable’s worst daily performance in thirty-four days.

GBP/USD now looks for support both at monthly lows and the 200-day SMA, or will risk a further move to the downside.

What’s next for GBP/USD?

Let’s discuss.

GBP/USD: Key takeaways 30/10/2025

• While still up around 5.40% year-to-date, owing mainly to dollar downside as opposed to pound strength, GBP/USD has recently fallen to 5-month lows of 1.31400
• Later this week, an Office for Budget Responsibility (OBR) assessment is expected to rein in productivity estimates for the UK economy, boding poorly for investor sentiment on the UK economy, weighing harshly on sterling pricing
• Bank of England Governor Andrew Bailey has recently acknowledged softening labour conditions and poor economic growth, but will be hard-pressed to cut rates in the upcoming decision, while inflation is nigh on twice the target of 2%

GBP/USD: Cable under tension

As an Englishman, I can say that the collective feeling amongst the British public regarding the UK economy currently leaves much to be desired.

The highest inflation of any G7 nation, rising unemployment, and, at best, a middling economy.

Safe to say, things are not looking too peachy going into Chancellor of the Exchequer Rachel Reeves' budget next month, which is almost sure to raise taxes in some capacity.

Put simply, the current outlook for the UK economy, particularly in terms of public finances, is less than stellar, which is encouraging those to sell sterling in favour of other currencies.

Let’s take a look at two headline macroeconomic themes within GBP/USD markets.

British Pound Currency Index (BXY) & US Dollar Currency Index (DXY), D1, TVC, TradingView, 30/10/2025

GBP/USD: Fundamental Analysis 30/10/2025

Markets are nervous of UK fiscal woes: While the public finances of many developed nations are currently somewhat dubious at best, this is particularly true for the United Kingdom, with a multibillion-pound hole that needs to be addressed by the upcoming budget in November.

While developments concerning the budget continue to do the media rounds, which will inevitably only increase as November 26th approaches, Rachel Reeves is stuck between a rock and a hard place, between honoring campaign pledges not to raise taxes on working people and VAT while simultaneously needing to find an estimated £30bn to balance spending with tax income.

To make matters worse, and coming at an inopportune time for the Chancellor of the Exchequer, an assessment to be released on Friday by the Office for Budget Responsibility (OBR) is expected to substantially downgrade UK productivity forecasts, resulting in a further estimate of £20 billion in shortfall.

Not to mention: government borrowing also exceeded estimates in the first half of 2025 by £7.2bn as per last week’s OBR commentary.

Tying this back to GBP/USD, however, is remarkably simple: the fiscal health of the UK economy appears to be worsening, and investors are collectively demanding a higher level of risk premium to hold sterling-denominated assets.

This fundamental downgrade in sterling’s rating when compared to other stores of wealth is what has led, in no small part, to recent GBP/USD downside.

The UK economy is at serious risk of stagflation. Granted, the term is often used loosely, but stagflation is a genuine concern for the UK economy. Currently, the Bank of England is faced with a serious ‘catch-22’:

• Rising unemployment, now at 4.8%, its highest level since July 2021
• Poor GDP growth, with recent estimates for Q2 at a measly 0.3%
• Stubborn inflation, at 3.8% YoY in September and, crucially, almost double the 2.0% target

Naturally, the top two bullets would support the notion of cutting rates, while stubborn inflation would support hiking, putting Governor Andrew Bailey and his team of decision makers in an inevitable position.

While the Bank of England is due to vote on monetary policy on November 6th, most predict their hand will be forced in maintaining rates at 4.00%, owing to recent inflation trends.

UK Interest Rates, investing.com 30/10/2025

By extension, a decision to hold would put further pressure on an already weak UK labour market and economy, which seems to be a conclusion the markets have already come to, with the first possibility of a rate cut expected to be in February 2026 at the time of writing.

At least one outcome of the above is the apparent decline in sterling value, with the current situation for the Bank of England enough to spook investors into rethinking their exposure to GBP.

GBP/USD: Technical Analysis 30/10/2025

Gold (XAU/USD): Daily (D1) chart analysis:

GBP/USD, D1, OANDA, TradingView, 30/10/2025

Having traded in range for some time, recent downside could be enough to break consolidation to the downside.

Fair to say, recent performance is decisively bearish, with a pin bar forming in yesterday’s session that bears will look to fill today.

Now with 5-month lows of 1.31400 and the 200-day SMA, GBP/USD will need to find support or risk a further move down:

Price targets and support/resistance levels:

• Price target/Resistance #1 - $1.31403 - Triple bottom lows
• Price target/Resistance #2 - $1.31011 - April highs/structure
• Support #1 - $1.32904 - Previous consolidation

• The meeting between Trump and Xi did not contain any surprises after the framework deal was revealed over the weekend. China achieved reduction in Fentanyl related tariffs while Trump secured soybean exports being resumed and China delaying its' export controls by at least a year.
• It is positive the two sides are able to de-escalate tensions quick and provide calm back into the global trading system. We expect to see more bumps on the road, but the two sides will try not to rock the boat ahead of Trump's China visit in April.
• With tariffs on China coming down, it narrows the gap to other Asian countries and could lead to a recovery in Chinese exports to the US and a rewidening of the trade deficit.

What did Trump and Xi agree on?

Below a short overview of what was agreed based on media reports:

• US fentanyl related tariffs on China cut from 20% to 10%
• China delays export controls on rare earths by a year and could be extended. In return US will suspend a new rule that broadens restrictions to any company at least 50% owned by companies on the entity list.
• China will resume soybean purchases from the US.
• A US probe into Chinese shipbuilding has been postponed while US and China discuss the issue further. China suspends its' countermeasures on shipping.
• US investigation into China's compliance with the Phase One agreement is also postponed.
• Trump set to visit China in April. Xi to vist the US later in 2026.

In addition, Trump mentioned on Air Force One that China will invest more in the US but provided no details.

Things missing from the deal was sales of Nvidia Blackwell chips but Trump said he would give more information later. Taiwan and a TikTok deal also didn't come up. And while they discussed the war in Ukraine, Trump said they did not talk about Chinese oil purchases.

Full report in PDF. 

The Eurozone economy expanded by 0.2% qoq in Q3, outpacing expectations of a 0.1% increase. EU GDP rose 0.3% qoq, marking a modest but welcome pickup in growth momentum. Compared with the same period last year, seasonally adjusted GDP grew 1.3% yoy in the Eurozone and 1.5% across the EU.

Among member states, performance was uneven but generally positive. Sweden led the bloc with a robust 1.1% quarterly increase, followed by Portugal (+0.8%) and Czechia (+0.7%). In contrast, Lithuania (-0.2%), Ireland, and Finland (both -0.1%) saw mild contractions. The data show that 14 countries posted positive year-on-year growth, with only one economy contracting.

Full Eurozone Q3 GDP release here.

The GBP/USD pair is consolidating around the 1.3200 level on Thursday, following significant losses in the previous session. The pair is now trading near its lowest point since April 2025, with selling pressure intensifying after the Federal Reserve cut interest rates by 25 basis points. While delivering the expected cut, Fed Chair Jerome Powell struck a hawkish note by stressing that further easing this year is not guaranteed, bolstering the US dollar.

The pound faces its own set of domestic headwinds. Mounting expectations of a Bank of England rate cut, combined with concerns over the upcoming November budget, are weighing on sentiment. During parliamentary hearings, Prime Minister Keir Starmer refused to rule out potential rises in income tax, national insurance, and VAT.

Further compounding the issue, press reports suggest the Office for Budget Responsibility (OBR) plans to lower its productivity growth forecast by approximately 0.3 percentage points. Such a revision could create a budget deficit of around £20 billion.

Softer-than-expected inflation data and a reported decline in food prices by the BRC have reinforced the market's view that the Bank of England is moving closer to easing monetary policy.

 Technical Analysis: GBP/USD

H4 Chart:

On the H4 chart, GBP/USD is developing a bearish wave structure targeting 1.3111. We anticipate the pair reaching this level before forming a consolidation range around it. Critically, this move is considered the third and typically powerful wave within the broader downtrend, with the 1.3111 target representing only its initial phase. Following consolidation, we expect a downward breakout and a continuation of the sell-off to at least 1.2830. This bearish scenario is confirmed by the MACD indicator, whose signal line is below zero and pointing decisively downward, indicating sustained selling momentum.

H1 Chart:

On the H1 chart, the pair has completed a downward impulse to 1.3193 and formed a consolidation range, which has since expanded down to 1.3139. We now foresee a technical retest of 1.3217 from below, after which a further decline towards 1.3111 is expected. A decisive break below this support level would open the path for a move down to at least 1.3015. The Stochastic oscillator supports this outlook, with its signal line having turned down from below the 80 level and heading towards 20, reflecting building bearish momentum in the short term.

Conclusion

GBP/USD is stabilising after a sharp drop, but the fundamental and technical backdrop remains bearish. Hawkish Fed rhetoric and a dovish shift in BoE expectations, alongside worrying UK fiscal signals, suggest any recovery may be short-lived. The path of least resistance appears lower, with key technical targets at 1.3111 and 1.3015.

• EUR/JPY extends 2025 uptrend after rebounding from the 20-SMA.
• Technical signals favor the bulls; another positive close needed.

EUR/JPY drifted higher following a relatively dovish Bank of Japan (BoJ) policy meeting on Thursday, which kept interest rates unchanged as widely expected but provided no clarity on the timing of potential rate hikes. Governor Ueda remains cautious amid ongoing uncertainties, including a shifting political landscape.

With the upcoming European Central Bank (ECB) rate decision in the spotlight, the pair extended its uptrend – initiated in February – to a new 35-year high of 178.40, strongly supported by the protective 20-day simple moving average (SMA) near 176.60.

Given that the RSI and stochastic oscillator are still fluctuating near overbought levels, a short-term pullback cannot be ruled out. Still, if the bulls manage to secure another higher close, the rally could next target the 161.8% Fibonacci extension of the latest pullback near 179.85 or even test the upper boundary of the bullish channel around 181.40.

If selling pressure drives the price below the 20-day SMA, initial support could emerge from the 50-day SMA and the channel’s lower boundary near 175.00. Further declines from there could retest the 172.30–173.00 support zone, ahead of the 171.00 psychological level.

Overall, EUR/JPY maintains a bullish bias, and another positive close above Monday’s high could open the door for further upside.

As expected, the Federal Reserve yesterday cut the Federal Funds Rate from 4.25% to 4.00%, while Jerome Powell’s remarks reduced the likelihood of further rate cuts. Meanwhile, decisions by other key central banks are also influencing the currency markets, according to Forex Factory:

→ The Bank of Canada lowered its policy rate from 2.50% to 2.25%, in line with market expectations. Its official statement highlighted risks of slower GDP growth, “continued weakness in the economy”, and concerns over U.S. trade relations and tariffs.

→ The Bank of Japan (BoJ) kept interest rates unchanged but signalled readiness to raise borrowing costs if economic conditions allow. This has shifted traders’ focus towards a possible rate hike as early as December.

→ The European Central Bank (ECB) is expected to leave its key rate steady, with the decision due at 16:15 GMT+3 today.

→ Next week, both the Reserve Bank of Australia and the Bank of England are scheduled to announce their policy decisions.

Against this backdrop, attention is increasingly turning to the Dollar Index (DXY) chart today.

Technical Analysis of the DXY Chart

On 19 September, we conducted a key analysis of the DXY chart, noting that:

→ The long-term downward channel (shown in red) remains relevant, divided into quarters by the intermediate QL and QH lines.

→ The index had rebounded from the QL line (marked by an arrow).

→ A bullish scenario was emerging.

Following that rebound, the price began to form an upward trajectory, reaching the upper boundary of the channel by 10 October — which, as anticipated, acted as strong resistance.

Currently, the DXY chart displays a narrowing triangle pattern, where:

→ The resistance is defined by the upper edge of the long-term descending channel that has contained the index’s 2025 movements.

→ The short-term upward channel from the September low remains intact.

This formation may reflect both the current balance of the U.S. dollar against a basket of major currencies and the uncertainty among analysts about its future direction.

Given the combination of central bank decisions, the U.S. government shutdown, geopolitical risks, and trade tensions, a breakout from this triangle could mark the start of a major trend lasting several weeks or even months.

Yesterday’s Fed decision strengthened the dollar, breaking through a local Bullish Flag pattern (shown in blue) and increasing the likelihood of further upward momentum.

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According to the chart, the Nasdaq 100 index (US Tech 100 mini on FXOpen) has climbed above the 26,260 mark for the first time in history. Market sentiment is being driven by an extraordinary combination of powerful news factors:

→ Meeting between US President Donald Trump and China’s leader Xi Jinping in Busan, South Korea. The talks lasted around one hour and forty minutes. Xi emphasised the importance of “steering the giant ship” of bilateral relations, while Trump described the meeting as “tremendous” and “fantastic”. However, few concrete details about a potential trade deal were revealed.

→ Federal Reserve rate cut. As expected, the Fed cut interest rates by 0.25% yesterday. Jerome Powell struck a cautious tone, using the metaphor of “driving through fog” to describe the lack of key inflation and labour market data due to the government shutdown. He also highlighted divisions within the committee, suggesting that another rate cut – possibly in December – remains uncertain.

→ Tech giant earnings reports. After the US stock market closed yesterday, Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META) released their quarterly results. A key theme across all three was massive capital expenditure on artificial intelligence. Investors are now questioning whether these heavy investments are beginning to pay off.

Technical analysis of the Nasdaq 100 chart

At the start of the week, when analysing the hourly chart of the Nasdaq 100 (US Tech 100 mini on FXOpen), we:

→ used the outlines of the 10 October sell-off to construct an upward channel (shown in blue);

→ drew a steeper trajectory using three orange trendlines;

→ suggested that the price target was the upper boundary of the blue channel.

That target has now been reached, and the upper boundary is showing signs of resistance — evidenced by the price slipping below the middle orange line and now being supported by the lower one.

Given the emerging RSI divergence, it is reasonable to assume that the upward momentum (+6% since the start of the month) may begin to slow. Note the recent bearish candlestick (marked by an arrow), notable for its strong move. Profit-taking could soon occur, with bears potentially attempting to push the Nasdaq 100 back down towards the median of the blue channel.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.