Currency Watch: Fed, BOE, and Non-Farm Payrolls Drive Market Direction
This week’s FX market is set to be shaped by key central bank decisions, US economic data, and ongoing geopolitical developments. Read on to find out which economic events to look out for and how they could affect price action.
EURUSD Slides Amid Fed-ECB Policy Split
EURUSD closed last week’s trading session lower, driven by diverging central bank policies. As widely expected, the Federal Reserve (Fed) cut interest rates by 0.25% while the European Central Bank (ECB) kept the interest rates unchanged. The ECB emphasised that ongoing uncertainty in Europe and persistent inflation pressures will likely keep interest rates at current levels for an extended period.
The US Dollar traded lower last week following the US – China tariff agreement, which gave equity markets room to breathe and recover to new all-time highs. This risk-on sentiment pushed investors toward stocks and away from the Dollar as a traditional safe-haven asset.
Markets Brace for NFP Amid Government Shutdown
This week, traders and investors will mainly focus on the US Non-Farm Payrolls (NFP) report. The continuing US government shutdown is expected to weigh on employment data, potentially resulting in a negative NFP figure for the month. Such an outcome could pressure both the US Dollar and the equity markets.
With a relatively light economic calendar this week, EURUSD is likely to keep trading within technical levels.
Other major US events on the economic calendar this week are the ISM Manufacturing PMI on Monday, which is expected to rise to 49.2, and the ADP Employment – expected at 25K – and the ISM services PMI forecast to come in higher at 51 on Wednesday. The major events conclude on Friday, with the NFP report, expected at 50K and average hourly earnings steady at 0.3%.
EURUSD Technical Outlook
Technically, the pair remains under pressure following last week’s close below 38.2% at 1.1536. Traders entered new long positions targeting profits above 1.1700.
Position sentiment now is BUY 70% – SELL 30%.
EURUSD chart, November 2, 2025. Source: TenTrade.com
UK Economic Concerns Weigh on GBP/USD
GBPUSD closed last week’s trading session lower, weighted down by comments from the UK Finance Minister regarding the underperforming UK economy and the recently announced UK budget. Traders’ positioning ahead of this week’s Bank of England (BOE) interest rate decision added further downside pressure, pushing the pair even lower. On the US Dollar side, the 0.25% rate cut by the Fed also contributed to the pair’s decline, although the move was largely anticipated by the market.
GBPUSD Weekly Outlook
As for this week, traders and investors will mainly focus on BOE interest rate decisions. The central bank is not expected to reduce interest rates at this meeting; however, the odds of a 0.25% rate reduction remain significant. If such a move does occur, GBPUSD could lose further ground during the week’s trading session.
In the US, the NFP report will be the main catalyst for market movement. The ongoing US government shutdown is expected to weigh on employment data, potentially resulting in a negative NFP figure for the month. Such an outcome could put additional pressure on the US Dollar and equity markets.
On the economic calendar we have on Monday the US ISM Manufacturing PMI expected to rise at 49.2. On Wednesday, the US ADP Employment report is forecast at 25K, alongside the ISM Services PMI, which is expected higher at 51. Thursday will be dominated by the BOE interest rate decision and accompanying press conference, while Friday sees the release of the US NFP, expected at 50K, with average hourly earnings anticipated to remain steady at 0.3%.
Technically the pair remains under pressure after last week’s close below the 50% retracement level at 1.3149. Traders have added long positions between 1.3100 and 1.3369, targeting profits above 1.3500. Market sentiment is strongly bullish, with 85% of positions on the buy side and 15% on the sell side.
Position sentiment now is BUY 85% – SELL 15%.
GBPUSD chart, November 2, 2025. Source: TenTrade.com
Key Takeaways
- EUR/USD slides after Fed cuts rates 0.25% while ECB holds; risk-on sentiment from the US-China tariff deal weakens the US Dollar.
- US Non-Farm Payrolls (NFP) and the government shutdown are expected to dominate markets, potentially pressuring USD and equities.
- GBP/USD under pressure from UK economic concerns, BOE rate expectations, and the Fed’s 0.25% rate cut.
- Technical outlooks: EUR/USD below 38.2% retracement at 1.1536 (target 1.1700); GBP/USD below 50% retracement at 1.3149 (target 1.3500).
- Market sentiment: EUR/USD 70% Buy / 30% Sell; GBP/USD 85% Buy / 15% Sell, reflecting bullish trader positioning despite short-term pressure.
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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