Forex News
- EUR/USD eases from daily highs as the US Dollar steadies following the latest batch of US economic data.
- US September PCE data broadly meet expectations, keeping the inflation outlook steady.
- Improving US consumer sentiment and softer hiring signals support the case for a dovish Federal Reserve.
The Euro (EUR) trims earlier gains against the US Dollar (USD) on Friday as the Greenback firms following the latest set of US economic releases. At the time of writing, EUR/USD is trading around 1.1645, easing from the daily high of 1.1628, though the pair remains on track for a second straight weekly gain as markets grow increasingly confident that the Federal Reserve (Fed) will cut interest rates next week.
The delayed US Personal Consumption Expenditures (PCE) report for September kept the overall inflation picture steady. Core PCE, the Fed’s preferred gauge, rose 0.2% MoM, matching expectations, while the annual rate eased to 2.8% from 2.9%. Headline PCE held steady at 0.3% MoM, matching the forecast and remaining unchanged from the previous month. On a yearly basis, the Index came in at 2.8%, in line with expectations and slightly above August’s 2.7%.
Beyond inflation, Personal Income increased 0.4%, beating the 0.3% forecast, while Personal Spending rose 0.3%, matching expectations and easing from August’s 0.5% gain.
The preliminary University of Michigan survey pointed to an improvement in consumer sentiment heading into year-end. The Consumer Sentiment Index rose to 53.3, above the 52 forecast and higher than the earlier reading of 51. The Expectations Index also strengthened, reaching 55, above the 51.2 forecast and rising from 51.
The 1-year inflation outlook fell to 4.1% from 4.5%, while the 5-year measure slipped to 3.2% from 3.4%.
Meanwhile, labour data released earlier this week showed a mixed picture. ADP Employment Change fell 32K in November, sharply missing forecasts, while Challenger Job Cuts dropped to 71.3K and Initial Jobless Claims declined to 191K.
Taken together, the steady inflation readings, easing consumer inflation expectations and softer hiring signals reinforce the case for a dovish Fed stance. According to the CME FedWatch Tool, markets assign about an 87% probability of a 25 basis point rate cut at the December 9-10 monetary policy meeting.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.03% | 0.19% | -0.66% | -0.27% | -0.06% | 0.18% | |
| EUR | -0.10% | -0.07% | 0.09% | -0.76% | -0.38% | -0.16% | 0.07% | |
| GBP | -0.03% | 0.07% | 0.12% | -0.69% | -0.31% | -0.09% | 0.14% | |
| JPY | -0.19% | -0.09% | -0.12% | -0.84% | -0.46% | -0.25% | -0.02% | |
| CAD | 0.66% | 0.76% | 0.69% | 0.84% | 0.38% | 0.59% | 0.83% | |
| AUD | 0.27% | 0.38% | 0.31% | 0.46% | -0.38% | 0.22% | 0.48% | |
| NZD | 0.06% | 0.16% | 0.09% | 0.25% | -0.59% | -0.22% | 0.23% | |
| CHF | -0.18% | -0.07% | -0.14% | 0.02% | -0.83% | -0.48% | -0.23% |
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).
The US Dollar’s (USD) sharp H1 2025 drop could push investors toward broader portfolios, though geopolitics and Fed risks may keep the currency unsettled. Analysts now expect EUR/USD to swing widely in 2026, trimming the 12-month target to 1.18 while keeping a modestly bullish bias, Rabobank's FX analyst Jane Foley reports.
Geopolitics to drive EUR/USD volatility
"The sharpness of the USD’s plunge in H1 2025 could itself encourage investors to favour a more diversified portfolio going forward into 2026. That said, issues related to trade tensions, geopolitics, Fed independence and US growth and inflation risks can all be expected to impact the value of the greenback next year."
"Developments in all these topics have the capacity to both spook and reassure investors. With this in mind, our central view is that EUR/USD is likely to trade in wide choppy ranges in the year ahead, with only a modest upside bias."
"We have removed EUR/USD1.20 from our 12-month forecast table and instead have a 1-year forecast of 1.18, with the slight upturn in the direction reflecting the risks to the USD of a dovish FOMC and the possibility that the market could be speculating about the first ECB rate hike of the cycle by the end of next year. We have maintained our 1-to-3-month forecast of EUR/USD1.16."
The FOMC is expected to deliver a 25bp rate cut with potential dissents, reflecting the tension between inflation risks and weakening employment. Federal Reserve (Fed) Gov. Jerome Powell is likely to emphasize data-dependence heading into January, while the new dot plot may still underplay the policy influence of the incoming Trump administration, Rabobank's Senior US Strategist Philip Marey reports.
Powell expected to downplay policy split
"We expect the FOMC to make a 25 bps cut to the target range for the federal funds rate to 3.50-3.75% from 3.75-4.00%. We also expect dissents, possibly in opposite directions."
"At the press conference, Powell will probably downplay any dissent as something that follows from a challenging situation with upside inflation risk and downside employment risk. Regarding the January meeting, he is likely to stress that the Fed is data-dependent and makes decisions meeting-by-meeting."
"The new dot plot will be of interest, but may still underestimate the impact of the Trump administration on the Fed next year. Looking ahead to next year, we expect the Fed to continue its cutting cycle at least until their estimate of the neutral rate is reached."
- GBP/USD climbs above key moving averages, signaling potential for further gains.
- US inflation data and consumer sentiment support expectations for a Fed rate cut next week.
- Bank of England expected to lower rates in December, easing cost-of-living pressures.
GBP/USD resumes its uptrend on Friday, trimming some of Thursday’s losses as the US Dollar (USD) recovers some ground. Inflation data in the US kept steady the chances of a Federal Reserve (Fed) cut at the December meeting, weighing on the Greenback. At the time of writing, the pair trades at 1.3349, up 0.19%.
GBP/USD rallies as US Core PCE reaffirms Fed rate cut in December
The Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge, which excludes food and energy, rose by 0.2% MoM in September, unchanged from August and aligned with estimates. In the twelve months to September, it ticked lower from 2.9% to 2.8%.
At the same time, the University of Michigan Consumer Sentiment in December rose to 53.3, above estimates of 52 and up from November’s final reading of 51. Joanne Hsu, the Director of the Surveys of Consumer, noted that “consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber.”
Americans' one-year inflation expectations in December dipped from 4.5% to 4.1%. For a five-year period, it decreased from 3.4% in November to 3.2%.
Given the backdrop, expectations for a 25 basis points (bps) Fed rate cut next week remained unchanged at 84%, as revealed by Capital Edge Rate Expectations Overview data.
After the data release, GBP/USD bounced towards 1.3350 after meandering around 1.3340 as the US Dollar tumbled to expectations of further easing.
In a note, Morgan Stanley said it expects a 25-bps cut in December, in January, and in April of 2026. They expect the Fed funds rate to end at 3%-3.25%.
The British Pound (GBP) shrugged off worries about last month’s budget, while business activity showed some improvement, according to S&P Global.
Despite this, the Bank of England is projected to reduce rates by 25 bps to 3.75% in the December 18 meeting after pausing its easing cycle in November.
GBP/USD Price Forecast: Technical outlook
GBP/USD seems capped by the 100-day Simple Moving Average (SMA) at 1.3365, even though the pair crossed above the 200-day SMA at 1.3326. Therefore, further consolidation lies ahead, and with the Fed's next meeting looming, a breach of the 100-day SMA is likely.
In that outcome, the next key resistance is 1.3400. Once surpassed, the next stop would be the October 17 high at 1.3471 ahead of 1.3500. On the flip side, GBP/USD’s drop below 1.3300 exposes the 50-day SMA at 1.3264, followed by 1.3200.
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.42% | -0.77% | -0.54% | -0.89% | -1.39% | -0.79% | 0.12% | |
| EUR | 0.42% | -0.35% | -0.11% | -0.47% | -0.98% | -0.37% | 0.54% | |
| GBP | 0.77% | 0.35% | 0.50% | -0.12% | -0.63% | -0.03% | 0.90% | |
| JPY | 0.54% | 0.11% | -0.50% | -0.35% | -0.87% | -0.26% | 0.65% | |
| CAD | 0.89% | 0.47% | 0.12% | 0.35% | -0.56% | 0.10% | 1.01% | |
| AUD | 1.39% | 0.98% | 0.63% | 0.87% | 0.56% | 0.61% | 1.53% | |
| NZD | 0.79% | 0.37% | 0.03% | 0.26% | -0.10% | -0.61% | 0.92% | |
| CHF | -0.12% | -0.54% | -0.90% | -0.65% | -1.01% | -1.53% | -0.92% |
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).
- Gold edges higher as steady PCE inflation and easing inflation expectations reinforce Fed rate-cut bets.
- Dovish Fed expectations and persistent geopolitical tensions continue to offer a supportive backdrop for Gold.
- Technically, XAU/USD needs a break above 4,250 to regain bullish traction, while 4,160-4,170 remains key near-term support.
Gold (XAU/USD) edges higher on Friday as the latest US economic data reinforces expectations of a Federal Reserve interest rate cut next week, with steady PCE inflation and easing consumer inflation expectations keeping the policy outlook firmly dovish.
At the time of writing, XAU/USD is trading near $4,245, keeping the metal on course for a modest weekly advance.
The delayed US Personal Consumption Expenditures (PCE) report for September offered no surprises. Core PCE, the Fed’s preferred gauge, rose 0.2% MoM, matching expectations, while the annual rate eased to 2.8% from 2.9%.
Headline PCE held steady at 0.3% MoM, matching the forecast and remaining unchanged from the previous month. On a yearly basis, the Index came in at 2.8%, in line with expectations and slightly above August’s 2.7%.
Market movers: Fed outlook and Russia-Ukraine peace talks in focus
- Personal Income rose 0.4%, above the 0.3% forecast, while Personal Spending increased 0.3% in line with expectations, easing from August’s 0.5% rise. The preliminary University of Michigan survey improved in December, with the Consumer Sentiment Index rising to 53.3 versus a 52 forecast, up from 51, while the Expectations Index climbed to 55 compared with the 51.2 forecast, also up from 51.
- Recent US labour data show ADP Employment Change falling by 32,000 in November, sharply missing expectations for a 5,000 increase after a revised 47,000 gain in October. Challenger Job Cuts dropped to 71.3K from 153.1K, while Initial Jobless Claims declined to 191K, beating expectations for 220K and down from 218K last week.
- These labour indicators are among the few data points the Fed has ahead of its policy decision. October and November Nonfarm Payrolls will be released together on December 16, which comes after the meeting. The next key update before the decision will be next week’s JOLTS Job Openings report.
- According to the CME FedWatch Tool, markets assign about an 87% probability of a 25 basis point (bps) rate cut at the December 9-10 monetary policy meeting.
- Elsewhere, geopolitical tensions remain in focus as Russia-Ukraine peace efforts show little progress. The Kremlin described recent talks with US envoys as “encouraging,” yet key territorial disagreements persist, keeping uncertainty elevated and offering a layer of support for safe-haven assets such as Gold.
Technical analysis: XAU/USD needs a break above $4,250 to regain traction
XAU/USD continues to trade sideways after breaking out of a symmetrical triangle pattern, with a lack of follow-through buying keeping upside attempts capped near $4,250.
On the 4-hour chart, XAU/USD is hovering around the 21-period Simple Moving Average (SMA), reflecting a neutral short-term bias. However, the broader uptrend remains intact and any dips are still likely to attract buyers.
On the upside, a clear break above $4,250 is needed to revive bullish momentum, opening the door toward $4,300 and potentially a retest of the all-time high near $4,381.
On the downside, support is seen at the lower edge of the recent consolidation zone around $4,160-4,170, followed by the 100-period SMA near $4,141.
Momentum indicators paint a neutral-to-bullish picture. The Moving Average Convergence Divergence (MACD) histogram is narrowing toward the zero line while remaining slightly negative, indicating fading bearish pressure as the MACD line holds just below the signal line near the midpoint. The Relative Strength Index (RSI) around 58 signals steady momentum without strong directional conviction.
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.
- EUR/GBP trades on the back foot as the British Pound remains broadly supported after the UK Autumn Budget.
- Technicals lean bearish as EUR/GBP holds below key short-term SMAs, with downside risk building toward the 100-day SMA.
- Momentum indicators reinforce the bearish tone, with the MACD turning negative and the RSI holding below 50.
EUR/GBP remains under pressure on Friday as the Euro (EUR) continues to soften against a broadly supported British Pound (GBP). Sterling has held firm since the UK Autumn Budget, even as markets maintain strong expectations for a Bank of England (BoE) interest rate cut at the December 18 meeting.
At the time of writing, EUR/GBP is trading around 0.8729, hovering near its lowest level since late October and on track for a third straight weekly decline.
From a technical perspective, EUR/GBP has been under steady downward pressure since topping out near 0.8865 in mid-November, a level that marked the year-to-date high and the strongest reading since April 2023. The pair has since fallen below the 21-day and 50-day Simple Moving Averages (SMAs), showing a shift toward a softer near-term structure as sellers continue to dominate.
However, prices are still holding above the 100-day SMA around 0.8711, which serves as an important immediate support zone. A clear break below this region would increase the risk of a deeper pullback toward 0.8670-0.8650.
Momentum indicators also support the bearish tone. The Moving Average Convergence Divergence (MACD) histogram has slipped into negative territory near the zero line, pointing to fading upside momentum. The Relative Strength Index (RSI) stands at 39.83, below the midline and signalling weakening traction but staying above oversold conditions.
On the upside, the 50-day SMA near 0.8751 acts as the first hurdle, followed by the 21-day SMA around 0.8787. A break above both moving averages would help restore bullish momentum and open the door for a move back toward the 0.8865 peak and beyond.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.14% | 0.09% | -0.60% | -0.47% | -0.25% | -0.03% | |
| EUR | 0.06% | -0.08% | 0.11% | -0.54% | -0.42% | -0.17% | 0.04% | |
| GBP | 0.14% | 0.08% | 0.19% | -0.45% | -0.33% | -0.11% | 0.12% | |
| JPY | -0.09% | -0.11% | -0.19% | -0.66% | -0.55% | -0.33% | -0.10% | |
| CAD | 0.60% | 0.54% | 0.45% | 0.66% | 0.11% | 0.33% | 0.58% | |
| AUD | 0.47% | 0.42% | 0.33% | 0.55% | -0.11% | 0.23% | 0.46% | |
| NZD | 0.25% | 0.17% | 0.11% | 0.33% | -0.33% | -0.23% | 0.22% | |
| CHF | 0.03% | -0.04% | -0.12% | 0.10% | -0.58% | -0.46% | -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 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).
- US core PCE inflation edged lower to 2.8% in September.
- US Dollar Index stays marginally lower on the day near 99.00.
The Personal Consumption Expenditures (PCE) Price Index rose 2.8% on a yearly basis in September, the US Bureau of Economic Analysis (BEA) reported on Friday. This print followed the 2.7% increase recorded in August and came in line with the market expectation. On a monthly basis, the PCE Price Index was up 0.3%, matching analysts' estimate and the August print.
The core PCE Price Index, the Federal Reserve's (Fed) preferred gauge of inflation, rose 2.8% on a yearly basis, down from 2.9% in August.
Market reaction
The US Dollar Index showed no immediate reaction to these figures and was last seen posting small daily losses near 99.00.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- Consumer confidence improved in December, surpassing market forecasts.
- One-year inflation expectation edged lower to 4.1%.
American consumer confidence edged higher in early December, as households grew more optimistic about current conditions and the broader economic outlook, according to preliminary data from the University of Michigan (UoM).
The closely watched Consumer Sentiment Index rose to 53.3 from 51 in November, surpassing economists’ expectations (52) and signalling an improvement in public confidence.
Furthermore, the Current Conditions index dropped a tad to 50.7 from 51.1, while the Consumer Expectations gauge advanced to 55 from 51, highlighting an upbeat scenario for the months ahead.
Inflation expectations, meanwhile, ticked lower. The one-year outlook eased to 4.1% from 4.5%, and the five-year forecast came in at 3.2% from 3.4%.
Market reaction
The US Dollar remains on the defensive, adding to the ongoing move lower and sending the US Dollar Index (DXY) to the area of multi-week lows in the sub-99.00 region.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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