Foreign Exchange Market Update

December 29, 2025

United States (U.S.) Pending Home Sales Surge in November

Pending home sales in the U.S. shot up by much more in November. Pending home sales index spiked by 3.3% to 79.2 in November after surging by 2.4% to 76.7 in October. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The bigger increase in pending home sales partly reflected strength in the West, where pending home sales soared by 9.2%. Pending home sales in the South also shot up by 2.4%, while pending home sales in the Northeast and Midwest jumped by 1.8% and 1.3%. 12/29/2025 - 10:11:00 (RTTNews)

Hong Kong Trade Deficit Widens in November

Hong Kong's trade deficit widened in November. The visible trade deficit increased to HK$48.5 billion in November, up from HK$43.4 billion in the previous year. The deficit was equivalent to 9.4% of the value of imports. In October 2025, the trade deficit totaled HK$39.95 billion. Annual growth in exports improved to 18.8% from 17.5% in October. At the same time, import growth softened to 18.1% from 18.3% a month ago.

Sustained moderate global economic growth and persistent demand for electronics-related products will underpin Hong Kong's merchandise trade growth in the near term. The government will continue its ongoing efforts to enhance economic and trade ties with various markets and remain vigilant to the developments of uncertainties in the external environment. 12/29/2025 - 05:02:00 (RTTNews)

Bank of Japan (BoJ) Summary Signals More Rate Hikes to Support Economy & Curb Inflationary Pressures

Policymakers of the Bank of Japan said the real policy interest rate remains the lowest globally, and it is desirable to steadily raise the rate to support the economy and curb inflationary pressures, the summary of opinions at the monetary policy meeting held on December 18 and 19 showed Monday. At the meeting, the board unanimously decided to hike the uncollateralized overnight call rate to "around 0.75%" from "around 0.5%."

The interest rate has reached its highest level since 1995. Previously, the BoJ lifted the benchmark rate by 25 basis points in January 2025. Even after the latest rate hike, real interest rates are likely to remain significantly negative, the board noted. The board emphasized the need to monitor the impact of the rate hike on the economy and financial markets.

Members said there may be a shift in the overseas environment from this year's tendency toward cutting policy interest rates to a tendency toward raising the rates next year.

"In order to avoid falling behind the curve, it is desirable for the Bank to steadily raise the policy interest rate," members said. The board said the bank should choose the appropriate timing to adjust the policy rate in the future, after examining the state of economic activity, prices, and financial markets. 12/29/2025 - 00:07:00 (RTTNews)