Forex News
- The Dow Jones softened alongside other indexes on the final trading day of 2025.
- Equities are closing out a strong December in a long run of strong months.
- US economic data continues to twist in a concerning direction.
US equities pulled back modestly midweek, but the broader picture for investors remains one of a strong year nearing its conclusion. The S&P 500 slipped about 0.2% on Wednesday, matching declines in the Nasdaq Composite, while the Dow Jones Industrial Average fell roughly 0.5%. The market is on a mild three-session losing streak, yet the losses have done little to dent what has been an impressive annual performance. The S&P 500 is on track for a gain of roughly 17% in 2025, its third consecutive double-digit advance, while the Nasdaq has climbed about 21% on the back of sustained enthusiasm around artificial intelligence. The Dow has lagged somewhat with a 13% gain, reflecting its lower exposure to technology stocks.
From a seasonal perspective, December has remained a buster month for equities. Both the Dow and the S&P 500 are on pace to finish the month higher, each notching what would be an eighth consecutive winning month, a streak not seen since 2018. The Nasdaq, however, has been roughly flat for the month, underscoring the more selective nature of recent gains.
Corporate and economic updates offered a mixed but generally stable backdrop. Nike (NKE) shares rose after multiple insiders, including board members and the CEO, increased their stakes following a difficult year in which the stock fell more than 17%. On the macro front, labor market data pointed to continued resilience. Initial jobless claims fell to 199K in the latest week, well below expectations, while continuing claims also declined, reinforcing the picture of a low-hire, low-fire environment as the year comes to a close.
Stocks had a rough start despite a strong finish
This strength marks a sharp recovery from the turmoil seen in early April, when sweeping tariff announcements triggered a near bear market drawdown that pushed the S&P 500 close to a 19% decline from its February high. Since then, investors have grown more confident that trade policy lessons were absorbed and that companies can adjust supply chains and pricing to protect margins. Even so, the recent softness has raised some concern, as the final trading days of the year and the first sessions of January are typically associated with the so-called Santa Claus rally. The current bout of profit taking may also be an early signal of choppier conditions ahead. While many strategists expect another positive year for stocks in 2026, there is growing debate over whether returns will be more range-bound as earnings growth works to justify elevated valuations.
Artificial intelligence continues to shape market narratives, though its influence has become more nuanced. After blockbuster gains in 2023 and 2024 tied to the emergence of generative AI, leadership broadened in 2025 and performance within the largest technology stocks diverged. Alphabet stood out with gains exceeding 65% as investors positioned it as a key AI beneficiary, while Amazon lagged with a much more modest advance. At the same time, returns outside the megacaps improved notably, with commodities delivering exceptional performance. Gold rose more than 64% this year and silver surged over 140%, putting both metals on track for their strongest annual gains since the late 1970s. This shift in market internals has fueled expectations that future returns may depend more on traditional fundamentals than on monetary policy or massive AI infrastructure spending.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- EUR/USD returns to levels past 1.1750 after hitting lows at 1.1720
- The minutes of the December Fed meeting provided some support for the US Dollar.
- The pair has broken below trendline support, a negative sign.
EUR/USD has turned positive on the daily chart on Wednesday. The pair found support at 1.1720 during the European morning session, and is trading at levels right above 1.1750 heading into the US session opening. The US Dollar recovery has lost steam, with US Jobless Claims expected to add some spice to a dozy year-end trading session.
From a wider perspective, however, the common currency remains on track to a 14% yearly appreciation, boosted by the monetary policy divergence between the European Central Bank (ECB) and the Fed. Apart from that, US President Donald Trump's erratic trade policies and the softening US economy have weighed heavily on the Greenback.
On Tuesday, the FOMC's minutes confirmed the wide divergence among Fed policymakers. The monetary policy committee approved a 25 basis points rate cut by a lower margin than previously thought and conditioned further monetary policy easing to a steady decline of inflation, which casts doubts about the timing of the next interest rate cut. The US Dollar appreciated after the release of the minutes.
In the macroeconomic calendar, the release of the US Initial Jobless Claims will gather investors' attention. Still, volumes are likely to remain at thin levels as most markets will be closed on Thursday amid the New Year festivities and with Japanese markets shut for the rest of the week.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.21% | 0.08% | 0.06% | 0.16% | 0.40% | 0.16% | |
| EUR | -0.12% | 0.11% | -0.04% | -0.06% | 0.04% | 0.28% | 0.05% | |
| GBP | -0.21% | -0.11% | -0.13% | -0.15% | -0.05% | 0.18% | -0.04% | |
| JPY | -0.08% | 0.04% | 0.13% | -0.00% | 0.08% | 0.32% | 0.11% | |
| CAD | -0.06% | 0.06% | 0.15% | 0.00% | 0.09% | 0.30% | 0.11% | |
| AUD | -0.16% | -0.04% | 0.05% | -0.08% | -0.09% | 0.24% | 0.01% | |
| NZD | -0.40% | -0.28% | -0.18% | -0.32% | -0.30% | -0.24% | -0.22% | |
| CHF | -0.16% | -0.05% | 0.04% | -0.11% | -0.11% | -0.01% | 0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: Fed minutes provided some support to the US Dollar
- The Euro accelerated its pullback on Tuesday as the minutes of December's Fed meeting cast doubt on the date of the next interest rate cut. The US Dollar, however, is set to close its worst yearly performance in the last eight years.
- The Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, has depreciated nearly 10% in the last 12 months.
- The minutes of the December 9-10 Fed Monetary Policy Meeting confirmed that the decision to cut rates by a quarter-point was approved by 9 votes against 3, the highest number of dissenters in the last six years. The divergence within the monetary policy committee reflects the challenging task of setting monetary policy to support a deteriorating labour market without boosting the already strong inflationary pressures.
- The minutes also revealed that most committee members judged that further rate cuts would likely be appropriate if inflation declined in line with the central bank's projections, and signalled one rate cut in 2026 and another one in 2027.
- On Wednesday, the focus will turn to the weekly US Jobless Claims report, which is expected to show that first-time applications for unemployment benefits rose to 220K in the week of December 26 from 214K on the previous one.
Technical Analysis: EUR/USD is likely to find resistance at the reverse trendline
The EUR/USD is showing a mild recovery at the time of writing, yet with technical indicators still at negative levels. The 4-hour Relative Strength Index (RSI) has bounced up from lows near oversold territory but remains below the key 50 line, while the Moving Average Convergence Divergence (MACD) shows an easing bearish momentum, yet still below zero.
To the upside, the reverse trendline, now around 1.1770, is likely to pose a significant resistance in case of a bullish reversal. This level closes the path towards the December 16 and 24 highs near 1.1805 area, and the September 23 and 24 highs near 1.1820.
A bearish reversal, on the contrary, is likely to face support at the December 17 and 19 lows near 1.1700. Further down, the next targets are the December 4 high and December 11 low, around 1.1680, ahead of the December 8 and 9 lows in the area of 1.1615.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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