Economic Update

November 10, 2025

USD – US Senate votes to end the government shutdown, but for how long?

Over the weekend, the US Senate approved a temporary funding deal, keeping most government departments open until January. Full-year agreements were reached for agriculture and veterans’ affairs, with provisions for back pay, healthcare votes, and food aid funding. The House of Representatives is expected to vote shortly, after which the bill will go to the President.

While the deal provides short-term relief, some Democrats have voiced concerns about its durability, suggesting the issue may resurface in early 2026.

With limited data last week—as the non-farm payrolls release was delayed again—attention turned to surveys. The ISM reports showed weakness in manufacturing but resilience in services. ADP employment data surprised to the upside, though Challenger layoffs surged. This week, markets will watch for the House vote and assess the economic calendar once clarity returns.

 

GBP – Data in focus as markets seek clarity on BoE direction

The Bank of England’s latest meeting delivered several surprises. Updated forecasts now point to weaker growth in 2026, inflation returning to target by Q4 2027, and unemployment peaking above 5%—a shift from previous expectations. The vote was finely balanced at 5–4, with Breeden, Taylor, Dhingra and Ramsden favouring an immediate rate cut to 3.75%. The majority, however, opted to hold at 4%. The December meeting could see another tight vote and Governor Bailey could have a difficult choice to make.

Attention now turns to this week’s UK data, including September’s labour market figures and Q3 GDP, alongside services, industrial production, and construction output. Should these releases indicate slowing activity and easing wage pressures, the case for monetary policy easing could strengthen.

Despite a late-week rally in GBP/USD, sterling remains under pressure. The recent sell-off may have outpaced fundamentals, suggesting scope for an additional modest rebound. However, the UK’s underlying political, economic, and fiscal challenges persist. Any sterling gains—particularly against the USD or EUR—are likely to be limited and short-lived. Potential rate cuts may simply offset the economic drag expected from the Chancellor’s upcoming Autumn Statement on 26 November.

 

EUR – Surveys and GDP to steer sentiment

Last week offered little in the way of surprises. ECB officials reiterated their data-dependent stance and commitment to price stability. While French industrial production and German orders exceeded expectations, German output remained subdued, recovering less than 40% of August’s decline.

This week’s focus shifts to November’s activity surveys and Q3 GDP. The Sentix investor confidence index, already released, reported an unexpected worsening. The German ZEW survey for November, due tomorrow, may reveal a split: a stagnant current conditions index and a modest uptick in expectations.

Later in the week, Euro Area industrial production is forecast to rebound, nearly reversing August’s decline. Revised Q3 GDP figures are unlikely to diverge from initial estimates. The euro’s room to appreciate against the dollar looks limited, albeit political developments in the US may influence direction more.

 

CAD – Quiet calendar may not mean calm markets

Canada’s labour market headline figures appeared strong last week, but the details told a different story. Job gains were concentrated in part-time roles, while full-time employment declined. However, a sharp rise in wage inflation has reduced the probability of further Bank of Canada rate cuts.

Despite ending the week only marginally higher, USD/CAD touched multi-month highs—a potentially important signal. With no major domestic data due, the Canadian dollar may remain vulnerable to external developments, particularly from the US.

 

MXN – Inflation falls again, but easing likely delayed

Mexico’s data last week included weak consumer confidence and a sharper-than-expected drop in fixed investment. Banxico responded with a rate cut to 7.25%, in line with expectations.

Inflation continued to decline, reinforcing the case for further easing—though this is more likely to resume in early 2026 than at year-end. Upcoming wage and industrial production data are unlikely to shift the policy outlook meaningfully.

 USD/MXN remains near year-to-date lows, but with limited domestic catalysts, a rebound in the dollar is plausible—particularly if rate differentials are set to narrow.

 

Author 

 

Views expressed in this commentary are those of the author, and may differ from your appointed Moneycorp representative. This commentary does not constitute financial advice. All rates are sourced from Bloomberg and forecasts are taken from Forex Factory.