What moved
The week was the New Zealand dollar going down. The kiwi was on the losing side of four of the six biggest moves among the 28 pairs, and NZD/CHF fell the most. The other two were the yen losing ground to the franc and the pound.
| Pair | Monday to Monday |
|---|---|
| NZD/CHF | -1.60% |
| GBP/NZD | +1.58% |
| NZD/CAD | -1.29% |
| EUR/NZD | +1.01% |
| CHF/JPY | +1.00% |
| GBP/JPY | +0.95% |
Against the basket of the other seven, the Swiss franc finished first, just ahead of the British pound and the Canadian dollar. The US dollar ended fifth, a little below zero. The New Zealand dollar finished last by a distance, with the Japanese yen seventh.
| Currency | Against the basket |
|---|---|
| Swiss franc | +0.65% |
| British pound | +0.60% |
| Canadian dollar | +0.33% |
| Euro | +0.04% |
| US dollar | -0.11% |
| Australian dollar | -0.17% |
| Japanese yen | -0.35% |
| New Zealand dollar | -0.97% |
Risk sentiment: drifting up, never quite risk on
Our risk sentiment reading, the heaviest of the four pillars at 40, stood at 0 on Monday morning and +2 on Tuesday. It rose to +11 on Wednesday, slipped to +6 on Thursday and reached +15 on Friday morning. Our label called it mildly risk off on all five mornings.
The market was calm for most of the week. The S&P 500 rose 0.7% on Monday, and oil eased that day as Iran prepared to host regional security talks, Bloomberg reported. The VIX drifted from around 18.5 on Monday to around 16.4 on Thursday evening. Friday afternoon broke the calm: tech stocks sold off, the S&P 500 fell 1.8% on the day, the VIX went back to around 19.9 and gold dropped 3.5% to around 3,890 dollars.
The currencies split along their own lines more than along the mood. Of the two havens, the franc came first and the yen came seventh. Of the cyclical currencies, the Canadian dollar held up with oil around 100 dollars and a rate hike behind it, the Australian dollar slipped to sixth, and the kiwi fell on its own central bank.
The central banks
Five banks met and only one moved.
- The RBNZ kept its cash rate at 2.75% early on Wednesday, Amsterdam time, while markets had expected a hike. The vote was 4-3, with three members for a 25 basis point increase, according to reports from New Zealand such as BusinessDesk. The bank's own release could not be checked at the time of writing.
- The Bank of Canada raised its policy rate by 25 basis points to 2.5% on Wednesday. "There could be a need to increase the policy rate further, but given uncertainties, Governing Council agreed to proceed carefully," its announcement said.
- The Fed kept its range at 3.75 to 4.00% on Wednesday evening, by 10 votes to 2. Lisa Cook and Beth Hammack wanted a hike of a quarter point. "Economic activity is expanding at a strong pace," its statement said.
- The ECB left its deposit rate at 2.50% on Thursday, as its decision shows. At the press conference the decision was described as unanimous, with a hike discussed. The same day the ECB said Christine Lagarde will step down on 7 February 2027 (ECB).
- The Bank of Japan kept its rate at 1.25% on Friday, with one member, Takata, voting for 1.5%. The bank also set out larger sales of its ETF holdings from January 2027, according to its statement.
Every rate and every next meeting is on the central banks page.
Geopolitics and the data
Australia opened the run of data. Australia CPI for September came in at 4.3% on the year, up from 4.0% in August, with the trimmed mean at 3.6%, in line with expectations (ABS). That keeps pressure on the RBA, which meets on Tuesday. The Australian dollar still finished sixth.
The US had the strongest figures of the week. US GDP grew at an annualised 3.4% in the third quarter, after 2.2% in the second (BEA). PCE inflation was 3.6% on the year in September, and 3.1% for the core measure (BEA). Durable goods orders rose 1.8% in September (Census Bureau). The dollar ended the week fifth anyway.
In Europe, eurozone GDP grew 0.4% in the third quarter, after 0.6% in the second (Eurostat). German inflation eased to 2.8% in October from 3.3%, with the core rate at 2.1% (Destatis). The German Ifo index rose to 90.2 on Monday (ifo). The euro finished fourth, close to flat.
Canada GDP was flat in August, and the third quarter grew 0.3% on the advance figures (Statistics Canada). Tokyo CPI put core inflation at 2.6% in October, down from 2.7% (Statistics Bureau of Japan). Britain had no major release, only the Budget on Wednesday, and the pound still finished second.
Oil stayed the line from geopolitics. WTI spent the week between roughly 100 and 104 dollars. The Bank of Canada noted in its announcement that the conflict in the Middle East is in its eighth month with no clear path to a resolution, and it named higher energy prices as a reason inflation stays up. That helped the Canadian dollar more than the Canadian figures did.
What the research said, and how it went
The four setups and what they came to are in the table at the top of this page: six calls, 3 of 6 the expected way, -0.10% together. The week before came to 3 of 4 and -0.08%, so two small losses in a row. The setups in the list without our mark did worse again, at 5 of 9 and -0.53%, and the whole list came to 8 of 15 and -0.63%. The running record is on the track record.
The dollar against the franc and the yen was read right on the right days. Long USD/CHF carried our mark on Tuesday and gained +0.25% to Wednesday, while the dollar was the strongest in the basket. Long USD/JPY on Friday gained +0.23% to Monday, after the Bank of Japan held and the yen stayed weak. Long AUD/CHF on Monday added +0.19%.
The kiwi was read right and timed wrong. NZD/USD moved -0.86% from Monday to Monday, and the kiwi was the weakest of the eight. But the one morning short NZD/USD carried our mark was Thursday, after the sharp fall on Wednesday. From Thursday to Friday the pair bounced, even on a day of strong US growth and inflation figures, and the call lost -0.47%. Long USD/CHF lost -0.29% from Wednesday to Thursday as well, over the Fed decision, when two votes for a hike did not lift the dollar against the franc.
The ranking had a poor week. The first currency beat the last on only 2 of 5 mornings, for -0.75% together. The franc, ranked last on Monday, finished first from there at +0.65%. The US dollar, ranked first, finished fifth at -0.11%. The pound, ranked third, did best of our top three and finished second at +0.60%.
This week
- Tuesday: the RBA decision at 04:30 Amsterdam and the New Zealand labour market at 22:45.
- Wednesday: eurozone inflation at 11:00.
- Thursday: the BoE decision, at noon London time.
- Friday: the US jobs report and the Canada jobs report, both at 14:30.
Two central banks and two jobs reports. The RBA meets after September inflation of 4.3%, and the Bank of England after a September vote in which three of nine members wanted a hike. The US midterm elections are also on Tuesday. Every date and time is on the calendar.