Forex Today: Markets Await Rate Cuts by the Fed and the Bank of Canada

By

Adam Lemon

Created on October 29, 2025

The central banks of both the USA and Canada are very strongly expected to cut interest rates by 0.25% today at their respective policy meetings.

The US Federal Reserve and the Bank of Canada are holding policy meetings today, and markets are unanimously expecting a rate cut of 0.25% by the Fed, and strongly expecting the same cut will happen in Canada too. Markets are showing an implied 91% probability that the Federal Reserve will make a further cut of 0.25% at its meeting in December.
The Bank of Japan will be holding a policy meeting tomorrow. The Bank is expected to leave its interest rate on hold.
Yesterday saw the strong rally in stock markets continue, with both the broad S&P 500 Index and the technology-focused NASDAQ 100 Index making new all-time highs, the latter above 26,000. In Asia, the Nikkei 225 Index and the KOSPI Composite, have both gained strongly today to reach new all-time highs, averaging more than 2%. Interestingly, these Asian stock markets are still outperforming the US market.
Gold and Crude Oil have begun to stabilize after falling for three consecutive days. In the case of Gold, the dominant event is the recent bubble bursting at the end of the huge bullish trend. In the case of Crude Oil, relevant news on Russia and the US stockpile have likely been the main drivers holding up the price from a further short-term decline.
President Trump has departed Japan and is on his way to Korea, where he will meet with Chinese president Xi on a trade and rare earths deal. Trump has again expressed optimism about lowering tariffs on China, which is likely also helping to give stock markets a bullish tailwind.
Australian inflation data has shown a surprise jump, with the annualized CPI rate rising from 3.0% to 3.%, while an increase to only 3.1% was the analyst consensus. This has given the Australian Dollar a firm boost, and the AUD/USD currency pair is trading up 0.34% on the day at $0.6606. This will make near-term rate cuts in Australia practically impossible.
In the Forex market, the Australian Dollar has been the strongest major currency since today’s Tokyo open, while the Swiss Franc has been the weakest. The USD/JPY currency pair is in some focus after triggering a long trade entry at most trend-following funds two weeks ago and is looking more bullish as it trades above ¥152.00. However, a bearish feature is the double top we are seeing in the price chart above ¥153.00. Trend traders will still want to be long here.
Soybean futures have made a new bullish breakout to a multi-month high price but the price action feels a bit muted so I don’t have a great deal of confidence in this trade. If Soybean futures are too big and expensive for you, you could consider the more accessible and affordable ETF SOYB if you want affordable exposure.