Forex News
- The Canadian Dollar flattened against the US Dollar on Tuesday.
- Holiday market volumes are constraining momentum, keeping price action subdued.
- Central bank rate trajectories remains the key focal point for Loonie markets heading into 2026.
The Canadian Dollar (CAD) flatlined on Tuesday, holding in a near-term range against the US Dollar (USD) as markets grind their way through the end-of-year slowdown. Market momentum remains absent with most market participants sidelined through the final trading week of 2025.
The meeting minutes from the most recent Federal Open Market Committee (FOMC) rate call, where the Federal Reserve (Fed) delivered a third straight interest rate cut, revealed little new information: despite a widening range of policy targets, the FOMC is overwhelmingly tilting into the dovish side, and is open to the idea of further interest rate cuts, but only in inflation metrics continue to ease.
Daily digest market movers: Canadian Dollar traders look ahead to the new year
- The Canadian Dollar struggled to find movement on Tuesday, stuck near familiar levels against the US Dollar.
- Deeply overbought Loonie markets could be primed for a short-term move lower, but are poised to give way to further gains as rate differentials begin to widen in 2026.
- The Bank of Canada (BoC) remains stuck in place with too-low interest rates, while the Fed looks set for further rate cuts next year.
- The Fed’s latest meeting minutes showed that policymakers are open to further interest rate cuts, but rate moves remain contingent on inflation continuing to ease.
Canadian Dollar price forecast
In the daily chart, USD/CAD trades at 1.3697. The pair holds below the 50-day and 200-day exponential moving averages, both pointing lower. The 50-day EMA has crossed beneath the 200-day EMA, reinforcing a bearish setup and keeping rebounds contained. RSI near 32 signals weak momentum after an oversold dip, while the Stochastic turning up from extreme lows hints at fading downside pressure.
Bearish momentum prevails while price remains under the falling averages and RSI stays south of 50. A daily close above the 50-day EMA would ease pressure and open scope for a corrective bounce toward the 200-day EMA, but failure to clear the former would keep risks tilted to fresh lows. Oscillator stabilization could fuel brief recoveries, yet trend signals still favor sellers until those moving-average barriers give way.
(The technical analysis of this story was written with the help of an AI tool)
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Here’s what you need to know on Wednesday, December 31st:
The highlight of the day was the Federal Open Market Committee (FOMC) Minutes from the December meeting, released in the American afternoon. The Minutes showed that most participants are willing to deliver additional rate cuts if inflation declines over time. The document also showed that economic growth is projected to move modestly faster than at the October meeting.
US Dollar Index (DXY) trades in the 98.20 price zone on Tuesday, gaining 0.2% for the day as the market digests the Federal Open Market Committee (FOMC) minutes released earlier today
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.25% | 0.19% | -0.03% | -0.10% | 0.14% | 0.22% | |
| EUR | -0.16% | 0.09% | 0.04% | -0.19% | -0.25% | -0.03% | 0.06% | |
| GBP | -0.25% | -0.09% | -0.04% | -0.28% | -0.35% | -0.13% | -0.05% | |
| JPY | -0.19% | -0.04% | 0.04% | -0.23% | -0.29% | -0.09% | 0.05% | |
| CAD | 0.03% | 0.19% | 0.28% | 0.23% | -0.05% | 0.19% | 0.24% | |
| AUD | 0.10% | 0.25% | 0.35% | 0.29% | 0.05% | 0.22% | 0.30% | |
| NZD | -0.14% | 0.03% | 0.13% | 0.09% | -0.19% | -0.22% | 0.08% | |
| CHF | -0.22% | -0.06% | 0.05% | -0.05% | -0.24% | -0.30% | -0.08% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Gold: The Yellow Metal traded above $4,350 on Tuesday, trimming back a quarter of its weekly losses after bottoming at $4,300 on Monday. The XAU/USD pair declined sharply after hitting an all-time high of $4550 at the beginning of the week, due to profit-taking ahead of the New Year’s holiday.
EUR/USD: The pair traded near the 1.1750 region at the time of writing, amid current market calm as we approach the New Year holiday. The United States (US) Federal Reserve (Fed) is expected to cut rates between one and three times next year, helping keep the pair afloat ahead of year-end.
GBP/USD: traded around 1.3470 on Tuesday, consolidating after surging to a more than three-month high near 1.3530.
USD/JPY: traded near the 156.40 price zone as the USD recovers some ground following the FOMC Minutes release.
The AUD/USD and the USD/CAD are ending the day pretty much unchanged.
Most financial markets will remain closed on Wednesday due to the New Year’s holiday.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- The Dow shed around 100 points on a quiet Tuesday as markets shuffle their feet.
- Energy sector gains struggled to push back against declines in healthcare and financials.
- The Fed’s latest Meeting Minutes showed a cautiously dovish FOMC, but revealed little new.
The Dow Jones Industrial Average (DJIA) sagged on Tuesday, declining around 100 points as equities grapple with holiday-constrained market flows and low end-of-year trading volumes. Moderate gains in energy sector stocks were offset by softness in the healthcare and financial services sectors.
Stocks split down the middle, Dow eases
The Dow Jones softened by around 100 points, struggling to keep a hold of the 48,400 level, while the S&P 500 and the tech-heavy Nasdaq both held close to flat, splitting the middle on gainers and losers for the day. Boeing (BA) climbed 1.75% after winning a government contract to build and supply more F-15 fighter jets to Israel, and UnitedHealth Group (UNH) gained 0.75%. Goldman Sachs (GS) fell 1.2% on Tuesday, serving as a general bellwether for year-end risk appetite and throwing some caution signs for traders dabbling in low-volume trading, while biopharma giant Amgen (AMGN) fell a similar 1% on the day.
The Federal Reserve’s (Fed) latest Meeting Minutes from its last interest rate decision of the year were released, giving investors a confirmation that Federal Open Market Committee (FOMC) voters are willing to play ball on the concept of further rate cuts, but otherwise revealing little of note. The Fed is tilting into the dovish side, with the majority of rate-setters willing to explore further rate trims, but Fed policy changes still rely on easing, not absent, inflation data.
Read more: FOMC Minutes showed most officials judged further rate cuts would be appropriate
Trump still wants to get rid of Powell early
US President Donald Trump has resumed his administrative policy approach of launching tirades against outgoing Fed Chair Jerome Powell. During a meeting with Israeli President Benjamin Netanyahu, Trump reiterated his stance that Fed Chair Powell is a “fool” and threatened to sue the head of the Fed for “gross incompetence”, mainly for not reducing interest rates as fast as Trump would personally like. Donald Trump tapped Jerome Powell as head of the Fed during his first term.
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 fell around 0.2% on a quiet, holiday-constrained Tuesday.
- Markets are churning quietly through the year-end low-volume period.
- Latest Fed Meeting Minutes confirm the Fed’s cautiously dovish tilt.
EUR/USD slipped into the 1.1750 region on Tuesday, falling back a scant one-fifth of one percent following several days of muted declines. Markets are slumping their way through the year-end holiday period, with low volumes and a global lack of market participants keeping meaningful momentum restrained.
Global markets are set to close on Thursday for the rollover into the new calendar year, leaving already restrained markets even deeper in a holiday lurch through the second half of the last trading week of 2025. Meaningful economic data releases are functionally non-existent for this week.
Fed wants to cut, but timing remains complicated
The latest Meeting Minutes from the Federal Reserve (Fed) show Federal Open Market Committee (FOMC) members are cautiously tilted toward the dovish side, with the majority of policymakers expecting further rate cuts in the future; however, the pace of future rate cuts remains contingent on several factors, specifically that US inflation metrics continue to ease lower.
Read more: FOMC Minutes showed most officials judged further rate cuts would be appropriate
Quality of American inflation data remains a concern for both investors and central bankers: despite a steep cooling in headline Consumer Price Index (CPI) inflation data at the last print, investors noted that the underlying data was missing several key components, and a large swath of the data that was present involved a high degree of assumptions and carry-forward estimates due to large chunks of missing price information. Even if headline inflation ticket figures continue to ease lower, a lack of accurate measurement will keep both FOMC votes and trader expectations on the back foot.
EUR/USD technical outlook
In the daily chart, EUR/USD trades at 1.1752. Price holds above the 50-EMA at 1.1675 and the 200-EMA at 1.1393, keeping a bullish bias intact. The 50-EMA rises and remains above the 200-EMA, reinforcing trend support. RSI at 60.22 stays bullish and below overbought. Initial support sits at the 50-EMA, while the 200-EMA underpins the broader advance.
Momentum cools at the margin as the Stochastic eases to 77.61 after exiting overbought, hinting at a pause or shallow consolidation. A close below the 50-EMA at 1.1675 would open room for a deeper pullback toward the 200-EMA at 1.1393, while sustained trade above the rising average would keep the upside scenario in play.
(The technical analysis of this story was written with the help of an AI tool)
EUR/USD daily chart
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.
The Federal Open Market Committee (FOMC) released the Minutes of the December meeting, and the document showed that most participants are willing to deliver additional rate cuts if inflation declines over time. The document showed that economic growth is projected to move modestly faster than at the October meeting.
Key Quotes
- Most participants judged further rate cuts would likely be appropriate if inflation declined over time as expected.
- Some of those who supported cutting rates indicated the decision was finely balanced, or they could have supported leaving rates unchanged.
- Most participants supported lowering the Fed funds rate, though some preferred leaving rates unchanged.
- Some participants suggested that under their economic outlooks, it would likely be appropriate to leave rates unchanged for some time after a December cut.
- Participants judged reserve balances had declined to ample levels, assessed it appropriate to begin reserve management purchases of Treasury securities.
- Several participants pointed to the risk of higher inflation becoming entrenched, suggesting further rate cuts could be misinterpreted as a lack of commitment to 2% target.
- Most participants noted moving toward a more neutral policy stance would help forestall possible job market deterioration.
- Policymakers emphasized the importance of communicating that Treasury purchases are solely to ensure rate control and have no monetary policy implications."
Market reaction to the FOMC Minutes
The US Dollar (USD) gained some upward traction with the headlines. The US Dollar Index (DXY) is currently up to the 98.20 area, but remains close to its recent multi-month low of 97.91.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.30% | 0.25% | -0.01% | -0.07% | 0.15% | 0.24% | |
| EUR | -0.18% | 0.12% | 0.06% | -0.20% | -0.26% | -0.03% | 0.06% | |
| GBP | -0.30% | -0.12% | -0.04% | -0.31% | -0.37% | -0.15% | -0.08% | |
| JPY | -0.25% | -0.06% | 0.04% | -0.27% | -0.31% | -0.10% | 0.03% | |
| CAD | 0.01% | 0.20% | 0.31% | 0.27% | -0.04% | 0.20% | 0.25% | |
| AUD | 0.07% | 0.26% | 0.37% | 0.31% | 0.04% | 0.22% | 0.30% | |
| NZD | -0.15% | 0.03% | 0.15% | 0.10% | -0.20% | -0.22% | 0.07% | |
| CHF | -0.24% | -0.06% | 0.08% | -0.03% | -0.25% | -0.30% | -0.07% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- NZD/USD trades without a clear direction on Tuesday, hovering around 0.5800 at the time of writing.
- Military tensions around Taiwan and caution ahead of the FOMC Minutes limit risk appetite.
- Diverging expectations on the Fed’s rate path keep uncertainty surrounding the US Dollar elevated.
NZD/USD trades virtually unchanged on Tuesday around 0.5800 at the time of writing, after trimming part of its recent losses. However, recovery attempts remain fragile, as markets are dominated by a combination of monetary caution and renewed geopolitical risks in Asia, a backdrop that is not particularly supportive for cyclical currencies such as the New Zealand Dollar (NZD).
Investors remain focused on rising tensions between China and Taiwan. Beijing has launched large-scale military drills around the island, including live missile-firing exercises, in retaliation for an agreement with the United States (US) involving an $11 billion military aid package to Taipei. Taiwanese authorities confirmed the deployment of their missile systems, reviving fears of a regional escalation. This environment weighs on overall risk sentiment and curbs demand for growth- and trade-sensitive currencies like the New Zealand Dollar.
On the monetary front, market participants are awaiting the release of the Federal Open Market Committee (FOMC) Minutes from the Federal Reserve (Fed) later in the day, looking for clearer insight into internal discussions on the future policy outlook. At its latest meeting, the Federal Reserve delivered its third rate cut of the year, bringing the federal funds target range to 3.50%-3.75%, while emphasizing a data-dependent approach, particularly regarding inflation and labor market conditions.
Updated projections from the US central bank point to a policy rate near 3.4% by 2026, implying a more cautious easing path than what markets are currently pricing in. According to the CME FedWatch tool, investors continue to expect at least two additional rate cuts by the end of 2026. This gap between market expectations and official guidance continues to generate persistent uncertainty around the US Dollar (USD), limiting directional momentum in NZD/USD.
On the New Zealand side, analysts believe the rate-cutting cycle of the Reserve Bank of New Zealand (RBNZ) is likely on hold for now. The central bank lowered its policy rate by 25 basis points in November to 2.25%, while stressing that future moves will depend on economic and inflation developments. This relatively cautious stance provides modest support to the Kiwi, but not enough to trigger a more sustained rebound against a US Dollar that itself lacks clear catalysts.
In this context of thin trading volumes ahead of the year-end holidays, NZD/USD remains confined around the 0.5800 area, with investors adopting a wait-and-see approach amid geopolitical uncertainty and still-mixed signals from US monetary policy.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.20% | 0.11% | -0.10% | -0.15% | 0.02% | 0.17% | |
| EUR | -0.06% | 0.14% | 0.06% | -0.17% | -0.20% | -0.04% | 0.11% | |
| GBP | -0.20% | -0.14% | -0.08% | -0.30% | -0.35% | -0.18% | -0.05% | |
| JPY | -0.11% | -0.06% | 0.08% | -0.22% | -0.26% | -0.11% | 0.08% | |
| CAD | 0.10% | 0.17% | 0.30% | 0.22% | -0.04% | 0.15% | 0.28% | |
| AUD | 0.15% | 0.20% | 0.35% | 0.26% | 0.04% | 0.17% | 0.30% | |
| NZD | -0.02% | 0.04% | 0.18% | 0.11% | -0.15% | -0.17% | 0.13% | |
| CHF | -0.17% | -0.11% | 0.05% | -0.08% | -0.28% | -0.30% | -0.13% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
- The Pound Sterling trades without a clear direction against the US Dollar after its recent three-month high.
- Investors await the Minutes of the Federal Reserve’s latest policy meeting for further guidance.
- The Bank of England’s rate outlook continues to support the British currency in the medium term.
GBP/USD trades around 1.3460 on Tuesday at the time of writing, down 0.30% on the day. The pair consolidates after failing to sustain the bullish momentum seen last week, which had lifted it to a more than three-month high near 1.3535. This pause reflects lingering hesitation in the US Dollar (USD), as market participants remain cautious ahead of the release of the Minutes from the latest Federal Open Market Committee (FOMC) meeting.
The US Dollar trades without a clear trend, with the US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, holding steady around 98.10. Markets are looking for more detailed insight into internal discussions at the Federal Reserve (Fed) regarding the monetary policy outlook. At its latest meeting, the Fed delivered its third consecutive rate cut of the year, lowering the Federal Funds target range to 3.50%-3.75%. Updated economic projections, including the dot plot, now point to a policy rate near 3.4% by 2026, suggesting only one additional rate cut next year.
This projected path appears more restrictive than what markets are currently pricing in. According to the CME FedWatch tool, investors remain highly confident that the Fed will deliver at least two further rate cuts, amounting to a cumulative easing of around 50 basis points by the end of 2026. This divergence between market expectations and official guidance continues to generate contained but persistent uncertainty around the US Dollar.
On the UK side, the Pound Sterling (GBP) continues to benefit from a relatively supportive backdrop. The currency has remained broadly resilient against its major peers in recent weeks, underpinned by expectations that the Bank of England (BoE) will proceed cautiously with monetary easing in 2026. At its latest meeting, the BoE lowered its policy rate by 25 basis points to 3.75%, while stressing that further easing would follow a gradual path.
This cautious stance reflects still-elevated inflation in the United Kingdom (UK). Although headline inflation slowed to 3.2% in November from a peak of 3.8% in September, it remains well above the central bank’s 2% target. BoE Governor Andrew Bailey recently noted that the scope for further rate cuts could be limited as policy approaches its neutral level, making future decisions highly dependent on incoming economic data.
Looking ahead to 2026, expectations for the BoE will largely hinge on developments in the UK labor market and Gross Domestic Product (GDP) growth. Labor demand remained subdued in 2025, as employers curtailed hiring to offset higher social security contributions, a factor that could continue to weigh on economic momentum.
In the United States (US), attention is also turning to political developments. US President Donald Trump said he would announce Jerome Powell’s successor as Chair of the Federal Reserve in January. This decision could influence monetary policy expectations, as the incoming Fed Chair is widely seen as potentially favoring a more accommodative stance, in line with the White House’s preference for lower interest rates even if financial markets remain strong.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.30% | 0.19% | -0.08% | -0.08% | 0.05% | 0.24% | |
| EUR | -0.13% | 0.15% | 0.06% | -0.21% | -0.21% | -0.08% | 0.11% | |
| GBP | -0.30% | -0.15% | -0.08% | -0.37% | -0.37% | -0.24% | -0.08% | |
| JPY | -0.19% | -0.06% | 0.08% | -0.26% | -0.26% | -0.14% | 0.08% | |
| CAD | 0.08% | 0.21% | 0.37% | 0.26% | 0.00% | 0.16% | 0.29% | |
| AUD | 0.08% | 0.21% | 0.37% | 0.26% | -0.01% | 0.13% | 0.29% | |
| NZD | -0.05% | 0.08% | 0.24% | 0.14% | -0.16% | -0.13% | 0.16% | |
| CHF | -0.24% | -0.11% | 0.08% | -0.08% | -0.29% | -0.29% | -0.16% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- AUD/USD trades higher around 0.6700 on Tuesday, supported by a modest rebound in the Australian Dollar.
- Expectations of a tighter monetary policy stance in Australia next year continue to underpin the local currency.
- Investors await the Minutes of the Federal Reserve’s December meeting to refine their rate outlook.
AUD/USD trades around 0.6700 on Tuesday at the time of writing, up 0.10% on the day, as markets remain cautious ahead of the release of the Minutes from the December meeting of the Federal Open Market Committee (FOMC), due later in the day. The pair benefits from moderate support to the Australian Dollar (AUD), driven by expectations that the Reserve Bank of Australia (RBA) could maintain a more restrictive bias for longer than other major central banks.
Hawkish expectations surrounding the Australian central bank are underpinned by the still-uncertain inflation outlook. In its latest communication, the Reserve Bank of Australia reiterated that it stands ready to tighten monetary policy further if disinflation were to lose momentum. Against this backdrop, investors will closely monitor upcoming Consumer Price Index (CPI) data, due in January, ahead of the February monetary policy meeting.
On the US side, the US Dollar (USD) is trading without a clear direction as investors await the Federal Reserve (Fed) Minutes. At the December meeting, the Fed cut interest rates by 25 basis points, bringing the target range to 3.50%-3.75%, while signaling that only one additional rate cut could take place in 2026, after three reductions already delivered in 2025.
Beyond the FOMC Minutes, market attention is also starting to shift toward political factors. US President Donald Trump said he would announce the successor to Jerome Powell as Chair of the Federal Reserve in January, a development that could influence monetary policy expectations and, in turn, the trajectory of the US Dollar in the months ahead.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.21% | 0.11% | 0.05% | -0.12% | 0.02% | 0.09% | |
| EUR | -0.07% | 0.13% | 0.04% | -0.03% | -0.20% | -0.03% | 0.02% | |
| GBP | -0.21% | -0.13% | -0.08% | -0.16% | -0.33% | -0.16% | -0.12% | |
| JPY | -0.11% | -0.04% | 0.08% | -0.07% | -0.23% | -0.09% | 0.02% | |
| CAD | -0.05% | 0.03% | 0.16% | 0.07% | -0.16% | -0.01% | 0.04% | |
| AUD | 0.12% | 0.20% | 0.33% | 0.23% | 0.16% | 0.17% | 0.21% | |
| NZD | -0.02% | 0.03% | 0.16% | 0.09% | 0.00% | -0.17% | 0.04% | |
| CHF | -0.09% | -0.02% | 0.12% | -0.02% | -0.04% | -0.21% | -0.04% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
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