The Xe Global Currency Outlook - November 2025

As 2025 enters its final stretch, the global currency landscape remains shaped by inflation dynamics, shifting interest rate paths, and the ripple effects of renewed trade tensions. The U.S. dollar continues to hold firm amid lingering inflation, while several major economies face headwinds ranging from stagnation to policy uncertainty. Here’s what’s driving markets this month.

United States (USD) – Holding the high ground

The U.S. economy continues to expand at a moderate pace, supported by a still-resilient labor market and elevated inflation. The Federal Reserve cut rates by 25 basis points in October but signaled caution—Chair Jerome Powell noted that another cut in December “is not a foregone conclusion.” With inflation hovering near 3%, yields remain elevated and the USD has strengthened. Unless inflation eases meaningfully, the greenback is expected to stay resilient into year-end.

Euro (EUR) – Consolidating after gains

The eurozone economy is steady, with Q3 GDP up 0.2% and inflation ticking slightly higher to 2.2%. The ECB kept rates unchanged at 2.0% and is showing little appetite for further easing. After strong appreciation earlier in 2025, EUR/USD has entered a consolidation phase. However, the dollar’s renewed strength could push the pair below 1.15 in the short term.

British Pound (GBP) – Stagflation struggles

The U.K. continues to wrestle with stagflation—sluggish growth, high unemployment (4.8%), and sticky inflation (3.8%). While markets expect the Bank of England to begin trimming rates later this year, the pound remains under pressure. GBP/USD is likely to stay range-bound to lower until the economy shows clearer signs of recovery.

Canadian Dollar (CAD) – Watching USMCA developments

Canada’s consumer spending is steady, but business investment remains weak. The Bank of Canada cut rates to 2.25% and signaled it may now be “at about the right level.” Markets are watching the accelerated U.S.–Mexico–Canada (USMCA) review, brought forward to November 3. Any tariff changes could spark short-term volatility in both CAD and MXN.

Japanese Yen (JPY) – Political pressure and a soft currency

Japan’s new Prime Minister, Sanae Takaichi—the country’s first female leader—appears less supportive of rate hikes than her predecessor. Combined with easing inflation, this stance could keep the yen weak. USD/JPY remains elevated around 154 and could test 160 in the months ahead, aligning with broader USD strength.

Chinese Yuan (CNY) – Policy balancing amid tariff tensions

China’s growth eased to 4.8% year-on-year, dragged by a sluggish property sector. Despite a temporary truce in U.S.–China trade tensions at the APEC summit, structural weakness and deflationary pressures persist. USD/CNY is expected to stay in a 7.08–7.15 range, with little sign of sustained yuan recovery.

Australian Dollar (AUD) – Supported by stronger data

Australia’s economy continues to outperform expectations. Inflation surprised to the upside at 3.2%, reinforcing expectations that the RBA will hold rates steady. Improving global sentiment and firmer commodity prices have lifted AUD/USD back toward 0.67. The trend remains positive, though capped by a resilient U.S. dollar.

New Zealand Dollar (NZD) – Weak growth weighs

New Zealand’s economy contracted 0.9% in Q2, with manufacturing still in decline. The RBNZ responded with a sharp 50-basis-point rate cut to 2.50% and could ease further in November. With the Fed on hold, policy divergence leaves the NZD vulnerable to further downside, potentially revisiting its October low near 0.57 against the USD.

Mexican Peso (MXN) – Strong despite trade risks

The peso has been one of 2025’s strongest emerging-market currencies, supported by structural improvements and a healthier current account. Still, uncertainty around USMCA negotiations could inject volatility this month. For now, USD/MXN remains stable between 18.19 and 18.62.

Key risks ahead

• The Fed maintains higher rates for longer, boosting the USD.

• GBP continues to slide under stagflationary pressure.

• CAD and MXN volatility rises amid trade policy shifts.

• JPY weakens further if political resistance to rate normalization continues.

• AUD outperforms as global growth fears fade.

What it means for businesses

Global currency markets are navigating diverging policy paths. For importers, exporters, and treasury teams, this means staying proactive with hedging strategies and maintaining flexibility to respond to fast-moving shifts—especially as trade negotiations and rate decisions dominate November’s agenda.

Need to stay ahead of market moves? Xe’s team of currency specialists can help you manage exposure, optimize conversions, and plan for volatility. Learn more at https://www.xe.com/business

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The content within this blog post is not intended for use as financial advice. This content is for informational purposes only.