Finance
Morning Bid: Is the dollar headed for the carvery?
Published by Global Banking & Finance Review®
Posted on November 27, 2025
3 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 27, 2025
3 min readLast updated: January 20, 2026
The dollar faces a significant decline amid global interest rate shifts. As markets adjust, traders focus on future rate changes and currency impacts.
A look at the day ahead in European and global markets from Tom Westbrook
As markets settled in for the U.S. Thanksgiving lull on Thursday, the dollar was drifting towards its largest weekly decline in at least four months and traders' thoughts were turning to 2026. [FRX/]
It seems the rest of the world is finishing up with interest rate cuts just as the U.S. eyes further easing.
South Korea was the latest to join the hawkish turn, dropping its easing bias and sending bonds tumbling. [.KS]
One-time Bank of Japan dove Asahi Noguchi also struck a mildly hawkish tone, advocating gradual hikes in a speech at Kyushu that followed a similar line to other BOJ policymakers.
A day earlier, the Reserve Bank of New Zealand effectively called time on its cutting cycle and the kiwi was still gaining on Thursday.
It is up nearly 2% since the policy meeting.
European Central Bank minutes are due later on Thursday from October's meeting where policymakers left rates on hold.
Confidence data is due in Europe and commodity markets are watching for progress to a Ukraine peace deal. Russia has ruled out any big concessions following the leak of a call between a senior Kremlin aide and U.S. envoy Steve Witkoff.
Markets still have about 90 basis points of U.S. rate cuts priced in between now and the end of 2026 - against 75 bps of hikes in Japan and 40 in New Zealand. The U.S. dollar index is down about 1% from a six-month high hit last week.
To be sure, rates are much lower in New Zealand and Japan than they are in the U.S., but currency markets are forward-looking and the direction of travel can drive exchange rates as investors look for the best yield.
Traders have been chatting about the Aussie as a potential breakout. After a hotter-than-expected inflation print on Wednesday, Australian 3-year and 10-year rates are the highest in the G10.
Yet the Aussie is trundling along in a channel it's held for 18 months. Perhaps a lurch higher in the yuan, which it tracks closely, can unshackle the currency. [CNY/]
Stock and bond markets are closed in the U.S. and trade for a half-day on Friday.
Key developments that could influence markets on Thursday:
-U.S. Thanksgiving holiday
-Euro zone consumer confidence, ECB minutes
(Reporting by Tom Westbrook; Editing by Kate Mayberry)
Foreign currency refers to any currency that is not the domestic currency of a country. It is used in international trade and investment, allowing businesses and individuals to conduct transactions across borders.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage. They are influenced by central bank policies and economic conditions, affecting consumer spending and investment.
Financial markets are platforms where buyers and sellers engage in trading financial assets such as stocks, bonds, currencies, and derivatives. They play a crucial role in the economy by facilitating capital flow.
Economic growth refers to an increase in the production of goods and services in an economy over a specific period. It is typically measured by the rise in Gross Domestic Product (GDP).
A central bank is a national financial institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy to stabilize the economy.
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