NVIDIA's strong earnings report attracts massive funds, causing a "storm" in the currency market: the US dollar breaks above 100, and the Japanese yen falls below the 157 level

On Wednesday (November 19), the global foreign exchange market staged a “bittersweet” drama. The US dollar index broke through the 100 mark to a record high of 100.24, the Japanese yen against the dollar fell to a 10-month low of 157.176, while the British pound retreated under pressure due to improved inflation prospects. Behind all this, there are both the re-adjustment of central bank policy expectations and unexpectedly positive tech giant earnings reports.

Japan’s Policy Shift Boosts Dollar Appreciation

Japanese Finance Minister Shunichi Suzuki met with Bank of Japan Governor Kazuo Ueda on Wednesday, signaling “high alert” to the market. This statement not only failed to stabilize the yen but accelerated its depreciation—the USD/JPY rose by 1.08%, hitting a new high since the beginning of the year.

Market concerns focus on the fiscal policy direction of Prime Minister Fumio Kishida’s new government. Reports indicate Japan plans to introduce a stimulus package possibly exceeding 20 trillion yen (about $129 billion), supported by an additional budget of approximately 17 trillion yen. Such large-scale spending driven by low interest rates naturally puts pressure on the yen. Sonia Martin, head of currency research at DZ Bank, pointed out that intervention risks are rising, but the Japanese government faces a dilemma when weighing policy choices.

UK Inflation Eases, Ringing Alarm Bells for the Pound

UK October Consumer Price Index (CPI) fell to 3.6%, down from 3.8% in the 18-month high in September, aligning with expectations from the Bank of England and the market. This positive signal reinforced expectations that the central bank will cut interest rates in December. Sanjeev Ranjan, chief economist at Deutsche Bank, stated that BOE Governor Andrew Bailey should be more confident in lowering the benchmark rate below 4%.

As a result, GBP/USD closed down 0.68% at 1.3057, after briefly touching a low of 1.3043 since last Friday. Before the release of the November 26 budget, market volatility in the UK may remain elevated.

Nvidia Earnings Shake Global Capital Markets

The key event stirring global financial markets was Nvidia’s Q3 earnings report. The chip giant delivered far better-than-expected results: revenue of $57 billion, up 62% year-over-year; with data center revenue of $51.2 billion, exceeding the expected $49 billion. More importantly, the company’s Q4 revenue guidance is about $65 billion, far ahead of analysts’ average estimate of $61.6 billion.

After the earnings release, Nvidia’s stock rose over 4% in after-hours trading. CEO Jensen Huang’s remark, “Blackwell chips are selling out, cloud GPU inventory is completely sold out,” reignited market imagination about the long-term prospects of AI. Morningstar’s chief analyst Kenneth Lamont bluntly said that Nvidia’s performance has become a macro event indicator, measuring the sentiment of today’s decisive investment themes.

ING forex strategist Francisco Pessolato believes this earnings report could very well be a “key turning point.” Few individual earnings reports can significantly impact the forex market, but if the data is extremely impressive or disappointing, market reactions will inevitably be very intense.

Dollar Depreciation Pressure and Safe-Haven Sentiment Battle

The US dollar index slightly broke through the 100 mark, closing up 0.53%. Pessolato pointed out that the dollar’s strength reflects two intertwined forces: one is the inflow of safe-haven funds, and the other is market pricing adjustments for the Fed’s December rate hike.

According to CME Group’s FedWatch tool, the market currently expects a 47% chance of the Fed cutting interest rates by 25 basis points on December 10, up from 42.4% the previous day. Although this change is subtle, it reflects market sensitivity to the interest rate path. President Trump criticized Fed Chair Powell again on Tuesday, saying, “I really want to get rid of the person now… but people are stopping me,” such political pressure will inevitably increase decision-making complexity.

Upcoming key data include the September non-farm payrolls. Earlier initial jobless claims data showed a surge in Americans claiming unemployment benefits from mid-September to mid-October, possibly indicating some pressure on the labor market.

Emerging Market Currencies Under Selling Pressure

Against the backdrop of risk asset sell-offs, various emerging market currencies are under pressure. AUD/USD fell 0.3% to 0.6489, NZD/USD dropped 0.5% to 0.5627, and NOK/USD declined 0.4% to 10.1418. The synchronized weakening of these currencies reflects a broad decline in investor risk appetite, and smaller currencies like the Taiwan dollar and Norwegian krone are also struggling in this adjustment. Market participants are systematically adjusting positions, gradually exiting high-yield, high-risk assets and shifting into safe assets like the US dollar.