SINGAPORE – The U.S. dollar weakened on Thursday as global currency markets saw light trading ahead of the Thanksgiving holiday, with investors shifting focus to 2026 when a series of U.S. interest rate cuts are expected. The euro climbed above $1.16, while the yen strengthened 0.4% to 155.87 per dollar.
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The New Zealand dollar surged to a three-week high of $0.5714 following a hawkish tone from the Reserve Bank of New Zealand and strong economic data. Despite a recent rate cut, the central bank suggested the easing cycle is likely over, prompting markets to anticipate a potential rate hike by December next year. Retail sales in New Zealand rose in the third quarter, and business confidence reached its highest level in a year.
Australia’s dollar also gained momentum after a hotter-than-expected inflation reading reinforced expectations that its easing cycle has ended. With a 10-year bond yield of 4.48%, the Australian dollar appears undervalued compared to other G10 currencies. Analysts note that the currency has closely tracked China’s yuan, which has surged recently, further supporting the Aussie’s upward trend.
The U.S. dollar fell on Tuesday after a mix of delayed and outdated economic reports boosted expectations of a Federal Reserve rate cut next month. Markets now see an 83% chance of a cut—up sharply from 50% last week.
By yesterday afternoon, the euro rose 0.5% to $1.1576 and the… pic.twitter.com/SZDiyCi4hJ
— Global DTT (@globaldtt) November 26, 2025
Meanwhile, the British pound rose to $1.3256, its highest since late October, buoyed by a government budget that eased concerns over the nation’s finances. Sterling is on track for its largest weekly gain since August, reflecting renewed confidence in the UK economy.
The U.S. dollar index held steady at 99.433, down from a six-month high hit last week, signaling its largest weekly drop since July. Analysts expect U.S. corporate and institutional demand for dollars to diminish after the holiday, with some speculating that potential leadership changes at the Federal Reserve could further weigh on the currency.
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Market observers note that as investors position for 2026, long U.S. dollar positions may lose appeal amid expectations of aggressive interest rate cuts in the United States.