Forex News
- The Japanese Yen attracts heavy selling after the BoJ's expected 25 bps rate hike this Friday.
- A positive risk tone also undermines the JPY and supports USD/JPY amid a fresh USD buying.
- Traders now look forward to BoJ Governor Ueda's commentary before placing directional bets.
The Japanese Yen (JPY) sticks to the post-Bank of Japan (BoJ) losses, which, along with a broadly firmer US Dollar (USD), assists the USD/JPY pair to hold steady above the 156.00 mark, or an over one-week high. As was widely expected, the BoJ board members raised the short-term interest rate by 25-basis-point (bps) to 0.75%, the highest in three-decades. In the accompanying policy statement, the central bank said the move should be seen as part of a gradual and cautious process rather than a shift toward restrictive policy. This seems to have tempered market bets for more BoJ rate hikes in 2025, which, in turn, undermines the JPY.
Apart from this, a generally positive tone around the equity markets is seen as another factor denting the JPY's safe-haven status. Traders now await BoJ Governor Kazuo Ueda's comments during the post-meeting press conference for cues about the future policy path in 2026, which should provide a fresh directional impetus to the JPY. In the meantime, the emergence of fresh USD buying continues to act as a tailwind for the USD/JPY pair. However, bets for more rate cuts by the US Federal Reserve (Fed) mark a significant divergence in comparison to the BoJ's relatively hawkish outlook, which could offer support to the lower-yielding JPY.
Japanese Yen remains heavily offered as traders trim bets for more BoJ rate hikes
- The Bank of Japan (BoJ) board members decided to raise the short-term interest rate by 25-basis-point (bps) to 0.75%, or the highest in 30 years, following the conclusion of its two-day policy meeting on Friday. The move was nearly fully priced in the markets and fails to boost the Japanese Yen.
- In the accompanying policy statement, the BoJ said that it would continue to raise the policy rate if the economy and prices move in line with forecasts. Policymakers added that the likelihood of achieving the baseline scenario has been rising, though they did not provide cues about future policy path.
- Earlier today, Japan's Statistics Bureau had reported that the National Consumer Price Index (CPI) rose 2.9% YoY in November, down slightly from 3.0% in the previous month. Further details revealed that a core gauge, which excludes volatile fresh food prices, held steady at 3%, as expected.
- Meanwhile, the core CPI that excludes both fresh food and energy prices, which is closely watched by the BoJ as a measure of underlying inflation, eased from 3.1% to 3% in November. Nevertheless, inflation in Japan remained sticky and well above the central bank's 2% annual target.
- The JPY bulls, however, seem reluctant and opt to wait for cues about the BoJ's appetite for further tightening before placing fresh bets. Hence, the focus will remain glued to BoJ Governor Kazuo Ueda's comments, which, in turn, should play a key role in influencing the JPY price dynamics.
- The recent sharp rise in Japanese government bonds – led by public debt of around 250% of GDP, which is the world's highest – continues to fuel concerns about Japan's worsening fiscal health amid Prime Minister Sanae Takaichi's massive spending plan. This further seems to undermine the JPY.
- From the US, the Bureau of Labor Statistics reported on Thursday that the Consumer Price Index (CPI) rose by the 2.7% YoY rate in November against 3.1% expected. Moreover, the core CPI, which excludes volatile food and energy prices, missed estimates and climbed 2.6% last month.
- The data indicated that inflationary pressures may be cooling enough for the US Federal Reserve to ease further. In fact, traders expect a 63 bps of rate cuts by the Fed in 2026. US President Donald Trump said the next Fed chair will be someone who backs sharply lower interest rates.
- This marks a significant divergence compared to hawkish BoJ bets and should support the lower-yielding JPY. The initial market reaction, however, turns out to be short-lived, which keeps the US Dollar close to the weekly high touched on Thursday and supports the USD/JPY pair.
- Investors look to the US economic docket – featuring Existing Home Sales and the revised University of Michigan Consumer Sentiment Index – for some impetus. Nevertheless, the USD/JPY pair seems poised to end nearly unchanged for the week, warranting caution for aggressive traders.
USD/JPY could extend the appreciating move towards monthly swing high
Against the backdrop of this week's breakout through the 100-hour Simple Moving Average (SMA), a sustained strength above the 156.00 mark will be seen as a key trigger for the USD/JPY bulls. Given that oscillators on hourly and daily charts are holding in positive territory, spot prices might then aim to test the monthly high, around the 157.00 neighborhood, touched last week, with some intermediate hurdle near the 156.55-156.60 region.
On the flip side, the 100-hour SMA resistance-turned-support, currently around the 155.30 zone, could protect the immediate downside ahead of the 155.00 psychological mark. A convincing break below the latter might prompt some technical selling and drag the USD/JPY pair to the 154.35-154.30 region, or the monthly low touched on December 5. This is followed by the 154.00 mark, which, if broken, might shift the bias in favor of bearish traders.
Economic Indicator
BoJ Press Conference
The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.
Read more.Next release: Fri Dec 19, 2025 06:30
Frequency: Irregular
Consensus: -
Previous: -
Source: Bank of Japan
- US Dollar Index gains ground to around 98.55 in Friday’s early European session.
- US CPI rose 2.7% YoY in November, softer than expected.
- Cooling US inflation could pave the way for Fed rate cuts.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades on a positive note near 98.55 during the early European trading hours on Friday. The DXY recovers some lost ground amid the cautious mood in the market. The University of Michigan Consumer Sentiment Index and UoM Consumer Inflation Expectations data will be the highlights later on Friday.
The US Dollar rebounds from the 11-week lows as traders turn cautious. However, the potential upside for the DXY might be limited due to prospects for more Federal Reserve (Fed) rate cuts in 2026 amid signs of a weakening US labour market and soft inflation.
US inflation, as measured by the Consumer Price Index (CPI), eased to 2.7% in November, according to the US Bureau of Labor Statistics (BLS) on Thursday. This reading came in below the market consensus of 3.1%. Meanwhile, US core CPI, which excludes volatile food and energy prices, rose by 2.6%, missing the expectation of 3.0%. This figure marks the slowest pace since 2021.
The softer than expected US inflation report has fueled speculation that the US central bank might cut interest rates sooner than previously expected. This, in turn, could exert some selling pressure on the Greenback in the near term.
Financial markets are pricing in only a 26.6% probability the Fed will reduce interest rates at its next meeting in January, after it cut them by a quarter-point at each of its last three meetings, according to the CME FedWatch tool.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- USD/CHF rises as the US Dollar recovers ahead of the University of Michigan Consumer Sentiment Index release on Friday.
- The Greenback may face pressure as softer November CPI boosts expectations of US Federal Reserve rate cuts.
- Traders seek SNB rate clarity, with a return to negative rates seen as unlikely due to risks to savers.
USD/CHF recovers its recent losses registered in the previous session, trading around 0.7950 during the Asian hours on Friday. The pair appreciates as the US Dollar (USD) recovers losses ahead of the release of the University of Michigan Consumer Sentiment Index for December later in the day.
The upside of the US Dollar could be restrained amid rising expectations of US Federal Reserve (Fed) rate cuts following the unexpectedly cooled US Consumer Price Index (CPI) inflation in November. US Consumer Price Index (CPI) eased to 2.7% in November. This reading came in below the market consensus of 3.1%. Meanwhile, the US core CPI, which excludes volatile food and energy prices, rose by 2.6%, missing the expectation of 3.0%. This figure marks the slowest pace since 2021.
On Thursday, US President Donald Trump noted that the next chairman of the Federal Reserve (Fed) will be someone who believes in lower interest rates "by a lot." Trump further noted that he will soon announce a successor to current Fed Chair Jerome Powell.
Switzerland’s Federal Customs Administration reported on Thursday that the trade surplus widened to CHF 3,841 million in November, marking the largest surplus since August. Exports rose 1.6% MoM to CHF 23,478 million, while imports declined 0.8% MoM to CHF 19,637 million, largely due to weaker chemical and pharmaceutical purchases.
Meanwhile, traders are seeking clarity on the Swiss National Bank’s (SNB) rate outlook, with the central bank seen as unlikely to return to negative interest rates given the potential adverse effects on savers and pension funds.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- Gold price loses traction in Friday’s early European session.
- Cooling US CPI inflation data could pave the way for more Fed rate cuts.
- The University of Michigan Consumer Sentiment Index for December will be the highlight on Friday.
Gold price (XAU/USD) declines to below $4,350 during the early European trading hours on Friday. The precious metal edges lower due to some profit-taking and weak long liquidation from shorter-term futures traders.
Nonetheless, the potential downside for the yellow metal might be limited amid rising expectations of further US Federal Reserve (Fed) rate cuts after the US Consumer Price Index (CPI) inflation cooled unexpectedly in November. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
Additionally, geopolitical tensions between the US and Venezuela, coupled with strong industrial and investment demand, could provide some support to the safe-haven asset such as Gold.
The longest federal government shutdown in US history had impacted data collection for the inflation report. Traders will take more cues from the University of Michigan Consumer Sentiment Index for December, which will be released later on Friday.
Daily Digest Market Movers: Gold tumbles despite Fed rate cut hopes
- The US CPI inflation declined to 2.7% in November, according to the US Bureau of Labor Statistics (BLS) on Thursday. This reading came in below the market consensus of 3.1%.
- The US core CPI, which excludes volatile food and energy prices, rose by 2.6%, falling short of analysts' estimates for an increase of 3.0%.
- "A surprisingly sharp decline in U.S. consumer price inflation should grease the wheels for further Fed easing in 2026," said Sal Guatieri, senior economist at BMO Capital Markets.
- US President Donald Trump said on Wednesday that the next Fed chair will be someone who believes in lower interest rates "by a lot.” He further stated that he will soon announce a successor to the current Fed Chair Jerome Powell.
- Financial markets are pricing in only a 26.6% chance the Fed will reduce interest rates at its next meeting in January, after it cut them by a quarter-point at each of its last three meetings, according to the CME FedWatch tool.
- The New York Times reported on Thursday that Venezuela’s government has ordered its navy to escort ships carrying petroleum products from its port. This action could escalate the risk of a confrontation with the US after Trump ordered a “blockade” aimed at the country’s oil industry.
Gold keeps the bullish bias and is set to retest a record high
Gold trades in negative territory on the day. According to the four-hour chart, the positive outlook of the precious metal remains intact as the price puts in higher highs and higher lows, and holds above the key 100-period Exponential Moving Average. Furthermore, the Bollinger Bands widen, and the 14-day Relative Strength Index (RSI) is located above the midline, suggesting that the path of least resistance is to the upside.
The first upside barrier for XAU/USD emerges at the upper boundary of the Bollinger Band of $4,352. A decisive break above this level could suggest that buyers are ready to jump in and sustain the climb back to an all-time high of $4,381, en route to the $4,400 psychological mark.
On the flip side, if bearish candlesticks start to show up and prices stay below the December 17 low of $4,300, sellers could gain traction and pull Gold toward the December 16 low of $4,271. Further south, the next contention level to watch is the 100-day EMA of $4,242.
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.
Gold prices fell in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 12,497.72 Indian Rupees (INR) per gram, down compared with the INR 12,547.46 it cost on Thursday.
The price for Gold decreased to INR 145,772.60 per tola from INR 146,351.10 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,497.72 |
10 Grams | 124,978.60 |
Tola | 145,772.60 |
Troy Ounce | 388,722.80 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- Australian Dollar loses as the US Dollar gains despite growing expectations of Federal Reserve rate cuts.
- Australia’s Private Sector Credit rose 0.6% MoM in November, while YoY growth accelerated to 7.4%, the fastest since January 2023.
- US CPI eased to 2.7% in November, while core CPI rose 2.6%, both below expectations.
The Australian Dollar (AUD) declines against the US Dollar (USD) on Friday, losing its daily gains. However, the AUD/USD pair received support as the US Dollar (USD) lost ground amid rising expectations of US Federal Reserve (Fed) rate cuts following the unexpectedly cooled US Consumer Price Index (CPI) inflation in November.
The AUD could receive support from investors’ caution following the release of Australia’s Consumer Inflation Expectations, which rose to 4.7% in December from November’s three-month low of 4.5%, supporting the Reserve Bank of Australia’s (RBA) hawkish stance.
Australia’s Private Sector Credit rose 0.6% month-over-month (MoM) in November, beating expectations of 0.2% but slowing from October’s 0.7% increase. On an annual basis, credit growth edged up to 7.4% YoY from 7.3%, marking the fastest pace since January 2023.
US Dollar gains ground despite Fed rate cut bets
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is holding steady and trading around 98.40 at the time of writing. Traders await the release of the University of Michigan Consumer Sentiment Index for December, which is due later on Friday.
- The US Bureau of Labor Statistics (BLS) released on Thursday that the US Consumer Price Index (CPI) eased to 2.7% in November. This reading came in below the market consensus of 3.1%. Meanwhile, the US core CPI, which excludes volatile food and energy prices, rose by 2.6%, missing the expectation of 3.0%. This figure marks the slowest pace since 2021.
- US President Donald Trump said on Thursday that the next chairman of the Federal Reserve (Fed) will be someone who believes in lower interest rates "by a lot." Trump further noted that he will soon announce a successor to current Fed Chair Jerome Powell.
- Federal Reserve (Fed) Governor Christopher Waller, who is under consideration to become chair of the central bank, reiterated his dovish stance on interest rates during a CNBC forum. “Because inflation is still elevated, we can take our time - there’s no rush to get down. We can steadily bring the policy rate down toward neutral,” Waller said.
- The CME FedWatch tool shows a 72.3% probability of rates being held at the Fed’s January meeting, down from 75.6% a day earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has risen to 27.7% from 24.4%.
- The US November jobs report showed payroll growth of 64K, slightly above forecasts, but October figures were revised sharply lower, and the unemployment rate rose to 4.6%, the highest since 2021, underscoring a gradually cooling labor market. Retail sales were flat on the month, reinforcing signs that consumer demand is losing momentum.
- Fed officials are split over whether more easing of monetary policy is needed next year. The median Fed official penciled in just one reduction in 2026, but some policymakers see no further cuts. Meanwhile, traders anticipate two rate cuts next year.
- Traders expect the RBA to deliver a rate hike as early as February. Commonwealth Bank of Australia and National Australia Bank now expect the RBA to start tightening sooner than previously projected, pointing to stubborn inflation in a capacity-constrained economy. Their forecasts followed the central bank’s hawkish hold on rates at its final 2025 meeting last week. Swaps price in a 28% chance of a February hike, nearly 41% in March, with August almost fully priced.
- Australia’s preliminary S&P Global Manufacturing PMI edged up to 52.2 in December from 51.6 previously, according to data released by S&P Global on Tuesday. Meanwhile, the Services PMI slipped to 51.0 from 52.8, and the Composite PMI fell to 51.1 from 52.6.
- The Australian Bureau of Statistics (ABS) reported last week that the Unemployment Rate steadied at 4.3% in November. The figure came in below the market consensus of 4.4%. Furthermore, the Australian Employment Change arrived at -21.3K in November from 41.1K in October (revised from 42.2K), compared with the consensus forecast of 20K.
Australian Dollar remains within a confluence support zone around 0.6600
The AUD/USD pair is trading below 0.6620 on Friday. The technical analysis of the daily chart shows the pair is positioned below the ascending channel trend, reflecting a weakening of a bullish bias. The nine-day Exponential Moving Average (EMA) trends higher, sitting just above the spot and capping attempts to extend. The short-term average has risen persistently over the past fortnight, indicating an improving upside bias.
The 14-day Relative Strength Index (RSI) at 56.76 (neutral-bullish) confirms building momentum. The pair maintains a modest uptrend as the nine-day EMA slope remains positive while price consolidates just below the average. RSI has cooled from overbought readings seen earlier this month, yet holds above the midline, keeping bulls in control.
The AUD/USD pair tests the nine-day EMA at 0.6621. A rebound toward the ascending channel would revive the bullish bias and support the pair to test the three-month high of 0.6685, followed by 0.6707, the highest since October 2024. On the downside, the AUD/USD pair could fall toward the psychological level of 0.6500, followed by the six-month low of 0.6414, recorded on August 21.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | 0.03% | 0.22% | 0.05% | 0.02% | 0.18% | 0.16% | |
| EUR | -0.04% | -0.01% | 0.16% | 0.00% | -0.01% | 0.15% | 0.12% | |
| GBP | -0.03% | 0.00% | 0.19% | 0.02% | -0.01% | 0.16% | 0.13% | |
| JPY | -0.22% | -0.16% | -0.19% | -0.16% | -0.18% | -0.03% | -0.05% | |
| CAD | -0.05% | -0.00% | -0.02% | 0.16% | -0.03% | 0.11% | 0.11% | |
| AUD | -0.02% | 0.01% | 0.00% | 0.18% | 0.03% | 0.16% | 0.13% | |
| NZD | -0.18% | -0.15% | -0.16% | 0.03% | -0.11% | -0.16% | -0.02% | |
| CHF | -0.16% | -0.12% | -0.13% | 0.05% | -0.11% | -0.13% | 0.02% |
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).
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
- AUD/JPY advances after the Bank of Japan raised its short-term interest rate by 25 basis points, as expected.
- BoJ decision was unanimous, with real rates to stay low and further hikes likely if forecasts are met.
- The Australian Dollar is supported as consumer inflation expectations reinforce the Reserve Bank of Australia’s hawkish stance.
AUD/JPY extends its winning streak for the third successive session, trading around 103.00 during the Asian hours on Friday. The currency cross gains ground as the Japanese Yen (JPY) declines after the Bank of Japan (BoJ) board members decided to raise the short-term interest rate by 25-basis-point (bps) to 0.75% from 0.50%, as widely expected. The Japanese central bank raised the benchmark interest rate to its highest in 30 years, as it seeks to move ahead with policy normalization set forth last year.
The Bank of Japan’s policy statement showed that the decision was made unanimously. The BoJ expects real interest rates to remain significantly low and reiterated that it will continue raising the policy rate if economic activity and prices evolve in line with its forecasts. The policy statement also indicated that the central bank will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving 2% inflation target.
The AUD/JPY cross also appreciates as the Australian Dollar (AUD) receives support from investors’ caution following the release of Australia’s Consumer Inflation Expectations, which rose to 4.7% in December from November’s three-month low of 4.5%, supporting the Reserve Bank of Australia’s (RBA) hawkish stance.
Australia’s Private Sector Credit rose 0.6% month-over-month (MoM) in November, beating expectations of 0.2% but slowing from October’s 0.7% increase. On an annual basis, credit growth edged up to 7.4% YoY from 7.3%, marking the fastest pace since January 2023.
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Last release: Fri Dec 19, 2025 03:20
Frequency: Irregular
Actual: 0.75%
Consensus: 0.75%
Previous: 0.5%
Source: Bank of Japan
- Silver price slumps to near $64.95 in Friday’s Asian session, pressured by some profit-taking.
- The downtick of Silver might be limited amid expectations of lower US interest rates.
- An escalation in US-Venezuela tensions could boost safe-haven assets such as Silver.
Silver price (XAG/USD) falls to around $64.95 during the Asian trading hours on Friday. The white metal retreats after hitting a record high in the previous sessions as traders book profits. The potential downside for Silver might be limited amid hopes of further US interest rate cuts following signs of a cooling inflation in the US.
Fresh US economic data on Thursday showed inflation cooled unexpectedly in November. The US Consumer Price Index (CPI) declined to 2.7% YoY in November, according to the US Bureau of Labor Statistics (BLS). This reading came in softer than the 3.1% expected. Meanwhile, US core CPI, which excludes volatile food and energy prices, rose by 2.6%, below the market consensus of 3.0%. This figure marks the slowest pace since 2021.
Softer inflation in November could pave the way for the Federal Reserve (Fed) to cut interest rates to help boost the faltering job market. This, in turn, could boost the Silver price in the near term. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal.
Additionally, a rise in US-Venezuela tensions could boost the safe-haven flows and support the white metal. Venezuela’s government has ordered its navy to escort ships carrying petroleum products from its port, per the New York Times. This action could escalate the risk of a confrontation with the US after Trump ordered a “blockade” aimed at the country’s oil industry.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The Bank of Japan (BoJ) board members decided to raise the short-term interest rate by 25-basis-point (bps) to 0.75% from 0.50% following the conclusion of its two-day monetary policy review meeting on Friday.
The decision came in line with the market expectations.
The Japanese central bank raised benchmark interest rates to its highest in 30 years, as it seeks to move ahead with policy normalization set forth last year.
Summary of the BoJ policy statement
Summary of the BoJ policy statement
BoJ makes policy decision by unanimous vote.
Real interest rates are expected to remain at significantly low levels.
Will continue to raise policy rate if economy, prices move in line with forecast, in accordance with improvements in economy, prices.
Will conduct monetary policy as appropriate from perspective of sustainably, stably achieving 2% inflation target.
Wage, inflation likely to continue rising moderately in tandem.
Economy has recovered moderately although some weakness seen.
Labour market conditions have continued to be tight, corporate profits to remain at high levels on whole.
Japan's economic growth is likely to be moderate.
The likelihood of realizing the baseline scenario has been rising.
Even after rate change, real interest rates remain deeply negative.
Real interest rates are expected to remain significantly negative.
Even after rate change, monetary environment remains accomodative, support economy.
Considering such factors as labour and management on spring wage talks, highly likely that firms will continue to raise wages steadily next year.
While uncertainties remain over US Economy and impact of trade policy, these uncertainties have declinedunderlying CPI inflation has continued to rise moderately
BoJ board member Takata opposed the description regarding the outlook for prices, considering that the level of therate of increase in the CPI, including underlying CPI inflation, already had generally reached the price stability target.
BoJ board member Tamura opposed description regarding the outlook for underlying CPI inflation.
BoJ board member Tamura considered underlying CPI inflation was likely to be at a level that was generally consistent with theprice stability target from the middle of the projection period.
Likelihood of underlying inflation converging around BoJ target in latter half of BoJ's three-year projection period is heightening
Underlying inflation continues to rise moderately.
Inflation expectations rising moderately.
Consumer inflation likely to fall below 2% towards first half of next fiscal year, then rise thereafter.
Must be vigilant to risks including fx market developements, overseas developments, corporate wage, price-setting behaviour.
Market reaction to the BoJ policy announcements
USD/JPY edges higher above 156.00 in an immediate reaction to the BoJ rate decision. The pair is up 0.28% on the day, as of writing.
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the weakest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.03% | 0.14% | 0.10% | 0.56% | 0.56% | -0.16% | |
| EUR | -0.15% | -0.13% | -0.02% | -0.07% | 0.42% | 0.39% | -0.30% | |
| GBP | -0.03% | 0.13% | 0.21% | 0.07% | 0.54% | 0.52% | -0.17% | |
| JPY | -0.14% | 0.02% | -0.21% | -0.01% | 0.43% | 0.41% | -0.05% | |
| CAD | -0.10% | 0.07% | -0.07% | 0.01% | 0.47% | 0.46% | -0.08% | |
| AUD | -0.56% | -0.42% | -0.54% | -0.43% | -0.47% | -0.02% | -0.71% | |
| NZD | -0.56% | -0.39% | -0.52% | -0.41% | -0.46% | 0.02% | -0.69% | |
| CHF | 0.16% | 0.30% | 0.17% | 0.05% | 0.08% | 0.71% | 0.69% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on December 19 at 00:34 GMT as a preview of the Bank of Japan Interest Rate Decision.
BoJ rate decision Overview
The Bank of Japan (BoJ) will announce its interest rate decision between 03.30 and 05.00 GMT, followed by Governor Kazuo Ueda's press conference at 06.30 GMT.
The BoJ is widely expected to raise interest rates to 0.75% from the current 0.50% at the conclusion of its two-day policy meeting on Friday. This would mark a 30-year high for the policy rate and underscore the central bank's confidence in achieving sustained wage gains and keeping inflation durably around its 2% target.
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
How could the BoJ rate decision affect USD/JPY?
USD/JPY trades on a negative note on the day in the lead up to the BoJ interest rate decision. The pair loses ground after data showed a softer-than-expected rise in US Consumer Price Index (CPI) inflation.
A rate hike will likely strengthen the Japanese Yen (JPY) against the US Dollar (USD). The first upside barrier for the pair is seen in the 155.95-156.00 zone, representing the December 18 high and the psychological mark. The next resistance level emerges at the December 9 high of 156.96, en route to the November 21 high of 157.60.
On the other hand, the December 18 low of 155.28 will offer some comfort to buyers. Extended losses could see a drop to the December 17 low of 154.51. The next contention level is located at the November 7 low of 152.82.
Economic Indicator
BoJ Press Conference
The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.
Read more.Next release: Fri Dec 19, 2025 06:30
Frequency: Irregular
Consensus: -
Previous: -
Source: Bank of Japan
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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