**Market Movements Ahead of the Fed Decision and US Payrolls Report**
*Based on the original article by Eren Sengezer, published on Mitrade, October 30, 2025.*
As financial markets navigate a pivotal week with the Federal Reserve’s (Fed) latest interest rate decision and the closely watched US Nonfarm Payrolls (NFP) report, major currencies have exhibited notable volatility. Investors are keenly focused on signals from central banks and key economic indicators that could influence global monetary policy trajectories. Here’s an in-depth breakdown of major Forex developments ahead of these critical events.
**US Dollar Holds Steady Before Fed Decision**
The US Dollar (USD) has stayed relatively resilient as markets anticipate the Federal Reserve’s policy decision scheduled for Wednesday. While recent inflation data suggest some easing in price pressures, uncertainty persists over whether the Fed will keep rates unchanged or opt for another hike.
Key factors influencing the USD:
– Market expectations are tilted toward the Fed holding the policy rate steady at 5.50 percent.
– Dovish rhetoric from certain Fed officials has fueled speculation that the tightening cycle may be nearing its end.
– Analysts are closely examining Fed Chair Jerome Powell’s forthcoming statement for clues on policy direction heading into 2026.
– The core PCE Price Index, the Fed’s preferred inflation gauge, showed a monthly increase of 0.2 percent in September and an annual rate of 3.7 percent.
If Powell emphasizes a data-dependent approach and exhibits cautious optimism on inflation, the dollar may face some pressure. However, if he reaffirms a commitment to higher-for-longer rates, USD could reclaim strength.
**Euro Seeks Direction Amid Mixed Eurozone Data**
EUR/USD wavered below the 1.0600 mark as eurozone economic data remain mixed. The European Central Bank (ECB) held rates steady last week, reinforcing the perception that policy tightening is on pause.
Factors influencing the euro:
– Eurozone economic sentiment and business climate indicators continue to show stagnation, limiting bullish momentum for EUR.
– Recent inflation figures from Germany, the bloc’s largest economy, revealed signs of cooling demand.
– German CPI decelerated to 3.0 percent year-over-year in October, down from 4.5 percent in September.
These macro trends have led to speculation that the ECB has likely concluded its rate hikes. As a result, the euro remains vulnerable, especially if incoming data confirm economic weakness across the bloc.
**British Pound Rebounds Modestly with Labor Market in Focus**
The GBP/USD pair showed modest recovery, hovering around the 1.2150 level, driven by slightly improved market risk sentiment and weak dollar consolidation. Still, uncertainty looms ahead of Thursday’s Bank of England (BoE) policy decision.
Key developments:
– The BoE is widely expected to leave interest rates unchanged at 5.25 percent, following signs of a slowing economy and easing inflation.
– UK GDP contracted by 0.1 percent in Q3, underlining the cost of prolonged monetary tightening.
– Wage growth remains high, raising concerns about sustained inflation in the services sector.
Markets await BoE Governor Andrew Bailey’s comments on whether the current policy rate is restrictive enough. If the BoE signals a prolonged pause or future cuts, GBP could lose ground in the near term.
**Japanese Yen Remains Under Pressure Despite BOJ Policy Shift**
USD/JPY remained elevated near 150.90, reflecting persistent yen weakness amid ongoing yield differentials. Investors keenly monitored the Bank of Japan’s (BoJ) policy meeting for guidance.
Highlights from the BoJ:
– The BoJ tweaked its yield curve control (YCC) policy, raising the ceiling on 10-year Japanese Government Bond (JGB) yields from 1.0 percent to 1.5 percent, indicating more flexibility.
– BoJ Governor Kazuo Ueda emphasized that policy normalization will be gradual and data-driven.
– Inflation in Japan continues to
Read more on EUR/USD trading.