The DBS Equilibrium Exchange Rates (or DEER) indicate fair values for global currencies relative to a trade-weighted currency basket.

The United States Dollar (USD) is still highly over-valued. USD has firmed slightly after the 30 October FOMC meeting, which saw Fed Chain Powell emphasizing that another rate cut in Dec is "far from" a foregone conclusion. Markets have pared back pricing of a full rate cut in Dec to just a 2 in 3 chance as of early November. The decline in the USD has also stalled since July, with its valuation holding steady. Since the Liberation Day tariffs, outflows from US assets have slowed amid a slew of trade deals, but the US economy and the USD still face uncertainty due to increased trade barriers.

The Euro (EUR) is moderately over-valued, despite its DEER valuation having slipped from near record high levels in September. The ECB kept rates unchanged on 30 October, though it refrained from pre-committing to a particular rate path. While domestic demand and services inflation remain strong, the ECB noted that the global environment is likely to remain a drag, with new manufacturing export orders pointing to further declines amid tariff increases. Meanwhile, French fiscal consolidation efforts also pose risks, with the Socialists demanding that the government raises more taxes on wealth to get its support for the Budget. The OAT-Bund 10Y spread has hovered around 80bps, suggesting that investors are still not comfortable with the French fiscal situation. The EUR's over-valuation could thus face a drag amid fiscal risks.