Foreign Exchange Market Update

November 19, 2025

U.S. Trade Deficit Narrows in August as Imports Plunge

A report released by the Commerce Department on Wednesday showed the U.S. trade deficit narrowed significantly in August amid a steep decline in the value of imports. The Commerce Department said the trade deficit shrank to $59.6 billion in August from a revised $78.2 billion in July. The narrower trade deficit came as the value of imports plunged by 5.1% to $340.4 billion in August after spiking by 5.9% to $358.8 billion in July. The report showed a steep drop in imports of industrial supplies and materials, particularly non-monetary gold, as well as notable decreases in imports of consumer goods and capital goods.

Meanwhile, the Commerce Department reported that the value of exports increased by 0.1% to $280.8 billion in August, following a 0.3% rise to $280.6 billion in July. The jump in exports of computers was largely offset by declines in exports of pharmaceuticals and non-monetary gold. The report also said the goods deficit narrowed to $85.6 billion in August from $103.7 billion in July, while the service surplus inched up to $26.1 billion in August from $25.6 billion in July. 11/19/2025 - 10:02:00 (RTTNews)

United Kingdom (U.K.) Inflation Eases to 3.6%; Raises Rate Cut Hopes

British Pounds traded at 1.3076 against USD at 9:00 AM PST

U.K. consumer price inflation eased in October, ahead of the Autumn budget announcement. The moderation eased pressure on households and raised hopes of an interest rate cut in December. The CPI logged an annual growth of 3.6% in October, slower than the 3.8% rise in September.

Monthly, the CPI moved up 0.4% after remaining flat in September. Core inflation that excludes energy prices, food, alcohol, and tobacco, edged down to 3.4% from 3.5% in September. The annual increase in goods prices weakened to 2.6% from 2.9%. Likewise, services inflation softened to 4.5% from 4.7%.

Chancellor Rachel Reeves said the fall in inflation is "welcome". But she said more needs to be done to bring it down. The chancellor is set to deliver the Autumn Budget on November 26. Reeves said the budget next week will deliver on the public's priorities to cut National Health Service waiting lists, cut national debt, and lower the cost of living.

Earlier this month, the Bank of England (BoE) maintained its key interest rate at 4.00% in a split vote. The central bank observed that inflation peaked in September and signaled that the interest rate will follow a gradual downward path if disinflation continues. The latest data is a hawkish tad for the BoE; the bank is still likely to cut rates in December.

With weak GDP figures for the third quarter, a softening labor market, and the likelihood of further fiscal consolidation measures in the Budget. Factory gate prices accelerated in October on higher food, motor vehicles, and other transport equipment prices. Factory gate prices were up 3.6% from last year, following a 3.5% rise in September. Meanwhile, input price inflation eased to 0.5% in October from 0.7% in the previous month.

Monthly output prices showed no movement in October, which remained unchanged from September. At the same time, input prices slid 0.3% after September's 0.1% drop. In September, average U.K. house prices grew 2.6% from the previous year. This followed a 3.1% increase in August. 11/19/2025 - 05:26:00 (RTTNews)