The dollar’s tone is uneven as global trading thins out amid holidays in the US and Canada. Sterling stands out with notable weakness after disappointing UK labor figures intensified expectations of a rate reduction next month. Meanwhile, the greenback inched to fresh highs versus the yen not seen since February, though it continues to hold under the JPY154.50 threshold. Commodity-linked currencies remain on the back foot, while Scandinavian units show modest resilience. With financial activity muted in North America, broader movements remain narrow and largely guided by earlier trends.

Asia Pacific Markets

In Asia Pacific, currency and rate dynamics revolve around the yen and Australian dollar. The dollar touched a new nine-month peak against the yen, inching close to levels last approached on October 30, while Japanese officials reiterated concern over one-way moves without suggesting imminent intervention. Policy divergence is clearer in Oceania: the Australian dollar recently tested resistance near $0.6540, aligning with major retracement zones after earlier declines. Against the New Zealand dollar, it reached the strongest point in twelve years, helped by interest-rate differentials, before settling into a tight consolidation range.

European Markets

European currency action centers on the euro’s tentative rebound and sterling’s renewed pressure. The euro attempted to recover from last week’s trough, advancing toward its short-term trend barrier and clustering around its 20-day average, reflecting a stabilizing tone after several months of setbacks in sentiment indicators.
In contrast, sterling gave back gains as weak employment metrics reignited concerns and drove bets on an upcoming rate cut to their highest in months. Job losses, softer wage growth, and an uptick in unemployment weighed heavily, halting its recovery against both the dollar and euro.

American Markets

In the US, banks and bond markets are closed, though equities continue trading amid political and data delays. A key funding compromise may reach the House floor tomorrow, but any resolution is unlikely to revive economic releases - such as October inflation and retail figures - postponed by the shutdown. The Dollar Index, rallying about 4% since mid-September when the Fed cut rates, now hovers under recent highs after stalling near its 200-day average.