Monthly Currency Report Summary – November 2025

Overview: November 2025 proved to be one of the most politically charged and sentiment-driven months of the year for major FX markets. Across GBP/USD, EUR/USD and GBP/EUR, price action was shaped less by traditional data releases and more by shifting expectations around fiscal tightening, central bank interest-rate trajectories, and—critically—the looming UK Labour budget at month-end.

For much of the month, markets wrestled with a combination of:

• Falling UK consumer and business confidence

• Sustained political instability in both the UK and Europe

• A prolonged US Government shutdown, which distorted expectations, reduced visibility of data, and encouraged defensive flows into USD

• Shifting expectations for December interest rate cuts across both the Federal Reserve and Bank of England

• Weaker Eurozone fundamentals, including poor German retail activity and rising concerns over fiscal sustainability

• Re-emerging US inflation pressures, highlighting the delicate balance the Federal Reserve faces through year-end

The overall pattern that emerged by late November was a market characterised by caution. The USD saw several waves of safe-haven support, while the GBP remained under pressure from fiscal anxiety surrounding the Labour Government’s budget, and the EUR responded inconsistently to mixed data and political developments.

Across the three majors, November delivered a month of heavy two-way volatility, capped rallies, and sentiment-led corrections — with December now poised to be one of the most consequential months in the monetary-policy calendar.

GBP/USD Performance

The GBP/USD (“Cable”) saw a sustained downward bias through November, defined largely by fiscal fears in the UK, the US Government shutdown, and defensive USD flows as traders awaited December’s rate decision from the Federal Reserve.

Early-to-Mid-Month Decline Driven by UK Fiscal Concerns

The month began under pressure as markets grew increasingly wary of the UK’s deteriorating fiscal outlook. Comments from Chancellor Rachel Reeves, combined with speculation about increases to tax burdens—particularly on capital gains and salary-sacrificed pension contributions—led traders to anticipate capital outflows away from the GBP over the coming months.

The Cable repeatedly struggled to regain ground above 1.3200, falling to lows near 1.3010, where technical support finally began to stabilise price action.
Throughout the mid-month sessions:

• UK GDP figures consistently disappointed

• Business investment data underwhelmed

• Retail volumes weakened

• Labour market readings revealed rising slack

• Traders increasingly priced in a December BoE rate cut

These factors kept upside capped and sentiment fragile.

Impact of US Government Shutdown & Data Disruptions

The USD’s performance became closely tied to uncertainty surrounding the US Government shutdown—the longest in modern history—which disrupted data flows and clouded the outlook for monetary policy.

Markets gravitated toward USD as a safe-haven through long periods of uncertainty, particularly when:

• Government funding negotiations stalled

• Traders feared delayed or unreliable economic data

• Inflation readings pointed to renewed price pressures

Unexpectedly strong PPI and CPI prints built the case for USD resilience and briefly pushed GBP/USD back below 1.3100.

Late-Month Price Stabilisation After UK Budget

The Autumn Budget, delivered on 27 November, initially triggered Sterling volatility as Reeves softened some expected tightening and provided a more measured fiscal path than feared.

Gilt yields fell sharply, signalling renewed confidence in the medium-term fiscal trajectory. This gave Sterling a rare burst of momentum:

• GBP/USD rallied toward 1.3268, its highest level in nearly two weeks

• Technical indicators briefly shifted into bullish territory

• However, much of the rally was short-lived

By 28 November, the pair once again slipped below 1.3200 in a retreat-driven, take-profit wave prior to the weekend.

End-of-Month Sentiment

Despite some renewed optimism following the budget, November closed with GBP/USD vulnerable to further declines. Traders remain cautious, with bearish sentiment anchored by:

• Anticipated BoE rate cuts

• Softer UK growth projections from the OBR

• Rising political tensions within the Labour Party

• Concerns about capital flight due to tax reform policies

EUR/USD Performance

EUR/USD began the month on the defensive and ended it struggling to establish any consistent directional bias. While the pair attempted several rallies, upside was repeatedly capped by weak Eurozone fundamentals and a structurally stronger USD.

European Political and Economic Headwinds

The Euro remained weighed down by:

• Weak German retail data

• Continued deterioration in France’s fiscal outlook

• Ongoing political instability across major EU economies

• Increasingly cautious tones from ECB commentary

• Falling inflation expectations in Germany and France

• A structural downtrend in industrial output

While bursts of optimism followed occasional strong economic prints or supportive ECB language, these moments were short-lived. Even when the Fiber pushed above 1.1600, the pair struggled to maintain momentum.

Technical Limits & the Monthly Moving Average

A recurring theme throughout November was the inability of EUR/USD to:

• Break above the monthly moving average

• Sustain levels above 1.1650

• Build momentum beyond the 1.1600–1.1650 range

Traders consistently noted these structural resistance zones as signals that the pair lacked fundamental justification for a sustained rally.

US Data and Fed Expectations Dominate

The USD regained strength several times as traders:

• Increased bets on a December rate cut

• Anticipated improved US inflation readings

• Responded to US shutdown-related risk aversion

• Prepared for Non-Farm Payrolls

With the US economy showing signs of resilience—even as the labour market softened—the Euro found itself subordinate to USD movements for most of the month.

End-of-Month Positioning

By late November, EUR/USD was consolidating around 1.1550–1.1600, restrained by:

• Limited Eurozone data

• Persistent Greenback strength

• A risk-off global backdrop

With German CPI looming, traders took a cautious stance heading into December, anticipating volatility and the potential for another EUR-led downswing.

GBP/EUR Performance

GBP/EUR saw some of the most volatile trading of the quarter, driven primarily by the divergence between UK fiscal risks and broader Eurozone weakness. The pair repeatedly approached and retreated from key technical levels, ending the month close to the lower end of its multi-month range.

Early-Month Sterling Weakness

At the start of November, GBP/EUR was weighed down by:

• UK budget fears

• Negative UK GDP and industrial data

• Political instability within the Labour Party

• Concerns about future tax policy

The pair struggled to hold 1.1350, falling toward levels last seen in early 2023.

Mid-Month Euro Strength

A strengthening EUR—driven by US shutdown risk and temporary positive EU sentiment— pushed GBP/EUR to fresh lows. Traders grew increasingly concerned that the UK would announce tightening measures that risked triggering domestic recessionary conditions.

Late-Month Sterling Relief Rally

After the Autumn Budget:

• The pair rebounded sharply above 1.1400

• Confidence returned as gilt yields fell

• Cross-market flows supported Sterling recovery

• The EUR softened on weak data and political concerns

Still, despite the rebound, upside remained limited due to expectations of BoE rate cuts and broader UK macro uncertainty.

By month-end, the pair drifted back below 1.1400, with markets distinctly hesitant to take directional positions ahead of December.

Key Market Influences in November 2025

1. UK Fiscal Policy and the Autumn Budget

The single largest driver of GBP performance was the UK’s budget debate. Key points included:

• Expectation of tax increases

• Concerns about public borrowing

• Fears of a hit to productivity and investment

• Uncertainty around corporate tax revisions

• Questions about medium-term fiscal sustainability

The budget delivered some stability but not enough to ease longer-term concerns.

2. US Government Shutdown

The shutdown:

• Disrupted data flow

• Drove risk-off USD safe-haven inflows

• Complicated expectations for the December Fed decision

• Limited visibility on inflation and labour market performance

This uncertainty fuelled USD strength through much of the month.

3. Central Bank Divergence

Throughout November:

• Traders increased expectations of BoE cuts in December

• The ECB was seen as less likely to cut before Q2 2026

• The Fed remained on track for at least one further cut

This divergence shaped cross-currency movements.

4. Inflation Readings

Fresh inflation data across regions moved markets sharply:

• UK CPI at 3.6% raised concerns about sticky price pressures

• US PPI came in stronger, supporting USD buying

• Eurozone inflation softened, weighing on EUR

Inflation remains a key macro theme into December.

5. Rising Political Risk

Political instability—especially in the UK and France—kept traders risk-averse and drove safe-haven flows into USD.

Outlook for December 2025

GBP/USD

Expect heightened volatility as markets prepare for:

• December BoE decision (likely cut)

• US employment data

• Further resolution of the US shutdown

A retest of 1.3000 cannot be ruled out.

EUR/USD

The Fiber may remain range-bound unless:

• German CPI surprises

• The Fed adopts a dovish tone

• Eurozone data deteriorates sharply

The 1.1600–1.1650 ceiling remains pivotal.

GBP/EUR

The pair is likely to trade reactively against cross-market flows:

• EUR strength caps upside

• UK fiscal concerns keep GBP heavy

• A break below 1.1350 could expose 1.1250

Conclusion

November 2025 was a month defined by caution, volatility, and shifting expectations. Across GBP/USD, EUR/USD and GBP/EUR, traders navigated a complex interplay of fiscal fears, political instability, shutdown-related uncertainty and central-bank positioning. While the late-month UK budget brought a brief window of optimism, the fundamental pressures facing both the Sterling and Euro remain intact.

As December approaches, markets brace for potentially decisive monetary policy decisions, ensuring continued volatility across major FX pairs.