The Xe Global Currency Outlook - October 2025

The U.S. economy keeps surprising to the upside even as the labor market cools. That mix—and a September Fed cut—has the USD resilient but range-bound, with the path of least resistance lower if the Fed eases again. EUR stays supported on firmer Eurozone momentum and a likely end to ECB cuts. GBP underperforms amid sluggish growth and sticky inflation. AUD shows modest outperformance as Australia improves and global tariff risks fade. NZD underperforms as the RBNZ leans into cuts after a sharp Q2 contraction. CAD stays soft on weak domestic data and tariff uncertainty. JPY struggles to strengthen while the BoJ remains on hold and inflation eases.

What changed this month (macro)

• The Fed cut 25 bps in September; markets lean to another move at the Oct 29 meeting.

• ECB held in September; Eurozone growth and low inflation support the euro.

• BoE on hold; UK growth subdued and inflation elevated.

• Asia: PBoC continues daily FX operations; BoJ steady with only moderate odds of an Oct 30 hike.

• Antipodes: RBA on hold; RBNZ likely to cut again Oct 8 after a larger‑than‑expected Q2 contraction.

Key takeaways by currency

• USD: Range-trading; resilient in September with downside risk if the Fed eases again.

• EUR: Likely to resume its appreciating trend as growth momentum firms and ECB is done cutting; EUR acts as an outlet for USD depreciation.

• GBP: Likely to lag; weak growth + high inflation keep BoE focused on persistence risks.

• CAD: Underperforms; soft economy, low inflation, and tariff uncertainty leave BoC room to cut.

• JPY: Hard to rally while inflation eases and BoJ stays patient; 200‑day MA at 148.44 is now a watch level for USD/JPY.

• CNY: PBoC keeps USD/CNY aligned with the broad USD trend; underlying China weakness caps CNY strength.

• AUD: Supported by improving domestic data, steady RBA, and ebbing global tariff fears.

• NZD: Softer on growth shock and looming RBNZ easing.

Pairs & levels we’re watching

• EUR/USD: Supported by growth and oil dynamics; likely to range ~1.1575–1.1918 near-term.

• GBP/USD: USD-led, sideways bias; risk toward 1.3200 over coming months.

• USD/CAD: Higher base likely around 1.39–1.40 as CAD lags and BoC stays dovish.

• USD/JPY: Above the 200‑day (~148.44); resilience in USD and softer Japan inflation keep dips shallow.

• USD/CNY: Modest downward drift but heavy PBoC smoothing limits CNY gains.

• AUD/USD: Uptrend intact; >0.6700 possible if global tone holds.

• AUD/JPY: Support ~96.60, scope up to 99.00 absent risk‑off.

• AUD/CNY: Scope toward 4.7500 on AU resilience vs. China softness.

• AUD/NZD: Around 1.135 (3‑yr high); watch RBNZ Oct 8.

• NZD/EUR: Near a 16‑year low (~0.494); risks still skew lower.

• NZD/JPY: Closed below 200‑day ~86.66; risk of further depreciation with RBNZ easing.

• NZD/CNY: Risks toward 4.0000 if RBNZ cuts more.

• USD/MXN: Trend modestly lower; could see ~18.20 by end‑October, but USMCA consultation headlines may add volatility.

Dates to watch

• RBNZ – Oct 8

• Fed – Oct 29

• BoC – Oct 29

• BoJ – Oct 30

• RBA – Nov 4

• BoE – Nov 6

Practical implications

• Consider staggering USD‑sell flows around late‑October central bank risk (Fed/BoC/BoJ).

• EUR dips remain interesting while Eurozone momentum holds and the ECB stays on hold.

• For CAD exposure, guardrails make sense into Oct 29 given soft domestic data and tariff risk.

• AUD exposures benefit from the soft‑landing narrative; NZD hedgers should account for RBNZ downside risk.

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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.