The final week of October (Oct 27–31, 2025) revolved around the Federal Reserve, a rate cut, and a cloud of policy uncertainty colliding with the ongoing U.S. government shutdown. The Fed delivered a 25 bps cut to 3.75–4.00%, but its hawkish tone curbed expectations for further easing. With official data frozen and sentiment fragile, traders looked to yields, Fed commentary, and price action for direction.
This set the tone across markets. The dollar’s reaction became the key driver — shaping moves in EURUSD and USDJPY, while the broader risk backdrop steered equities like the Nasdaq 100.
In this week’s fundamentals, we break down how each market responded to the Fed’s “hawkish cut,” and what to watch in the week ahead (Nov 3–7) as the shutdown and NFP uncertainty continue to dominate sentiment.
🇪🇺 EURUSD — Pressured as the Dollar Holds Ground
EURUSD drifted lower through the week as the Fed’s message recalibrated the rate-cut narrative. The ECB remained in the background with no major releases, leaving the euro at the mercy of dollar dynamics.
The rate cut, paradoxically, strengthened the USD—because Powell’s tone was firm, emphasizing data dependency and not pre-committing to more easing. That hawkish undertone lifted yields and revived dollar demand.
The Eurozone side offered little resistance: growth data remained subdued, and inflation moderation kept the ECB comfortably sidelined.
EURUSD faded back toward recent lows near 1.165 – 1.17 as the dollar regained footing.
EURUSD Hourly Chart (Weekly Projection)
🇯🇵 USDJPY — Yield Differentials Still Dominate
What happened: USDJPY traded higher, brushing the 153.8 – 154.0 zone, driven by persistent yield spreads. The Bank of Japan stayed dovish, sticking to its ultra-loose stance and verbal interventions to “monitor speculative moves.”
U.S. yields’ slight uptick post-FOMC widened the U.S.–Japan differential again, encouraging another leg up.
However, officials’ rhetoric reminded traders that intervention risk lurks near 155, introducing short-term hesitation.
USDJPY Hourly Chart (Weekly Projection)