Forex News
- EUR/GBP declines to near 0.8720 in Wednesday’s early European session.
- The BoE delivered a rate cut in December but signaled caution, supporting the Pound Sterling.
- ECB kept interest rates unchanged earlier this month and hinted that they are likely to remain unchanged in 2026.
The EUR/GBP cross softens to around 0.8720 during the early European session on Wednesday. A cautious tone surrounding the Bank of England’s (BoE) policy outlook could provide some support to the Pound Sterling (GBP) against the Euro (EUR). Trading volumes are expected to remain thin ahead of the New Year holidays.
The UK central bank reduced interest rates from 4.0% to 3.75% at its December policy meeting, the lowest level in nearly three years. Governor Andrew Bailey said during the press conference that rates are likely to continue on a gradual downward path, but "how much further we go becomes a closer call" with each cut.
Money markets expect the BoE to deliver at least one rate reduction in the first half of the year and are pricing in nearly a 50% probability of a second cut before the year-end, according to Reuters.
The European Central Bank (ECB), however, kept rates unchanged and its outlook suggested less urgency for further cuts, which might help limit the EUR’s losses. ECB President Christine Lagarde highlighted a data-dependent, "meeting-by-meeting" approach. She added that the central bank is not pre-committing to any future rate path, though some economists anticipate the rates to remain steady through 2026.
On the other hand, heightened geopolitical uncertainty in Ukraine could weigh on the Euro. Russia accused Ukraine of launching a drone strike on the Russian presidential residence in northern Russia, prompting Moscow to reconsider its stance in peace negotiations, per Reuters. Ukraine dismissed Russian statements about the drone attack, and its foreign minister said Moscow was seeking "false justifications" for further strikes against its neighbor.
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.
- Gold price jumps in Wednesday’s early European session.
- Expectations of US interest rate cuts and ongoing geopolitical tensions boost the Gold price.
- Some profit-taking and portfolio rebalancing cannot be ruled out ahead of the New Year's holidays.
Gold price (XAU/USD) extends the rally above $4,350 during the early European trading hours on Wednesday. Gold's price has surged about 65% this year and is set to record its biggest annual gains since 1979. The rally in the precious metal is bolstered by the prospect of further US interest rate cuts in 2026. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
Furthermore, the persistent Israel-Iran conflict and the ongoing US-Venezuela tensions could boost the yellow metal. It’s worth noting that traders seek assets that can preserve value during periods of uncertainty, which supports a traditional safe-haven asset such as Gold.
On the other hand, increased margin requirements on gold and silver futures by the Chicago Mercantile Exchange (CME) Group could prompt widespread profit-taking and portfolio rebalancing, which might cap the upside for the yellow metal. Additionally, reported progress on a Ukraine peace deal might drag the Gold price lower.
Traders brace for the release of the US Initial Jobless Claims report later on Wednesday. Economists forecast a modest rise in new applications for the week ending December 27 to 220,000, compared to 214,000 in the previous week. Financial markets are expected to trade on thin volumes as traders prepare for the New Year holiday.
Daily Digest Market Movers: Gold heads for biggest annual price gains in over 40 years
- The US Federal Reserve (Fed) decided to cut the interest rate by 25 basis points (bps), bringing the federal funds rate to a target range of 3.50%–3.75%. Those in favor cited increased downside risks to employment and easing inflation pressures.
- Fed Governor Stephen Miran voted against the action in favor of a jumbo rate cut, while Chicago Fed President Austan Goolsbee and Kansas City’s Jeff Schmid dissented in favor of leaving rates unchanged.
- According to minutes from the Federal Open Market Committee (FOMC) at its December 9-10 meeting, most Fed officials saw further interest-rate reductions as appropriate so long as inflation declines over time, though they remained divided over when and how far to cut.
- Following the FOMC minutes’ release, the probability of a January cut based on federal funds futures contracts declined slightly to about 15%, according to the CME FedWatch tool.
- The Chicago Mercantile Exchange (CME) Group, one of the world’s largest trading floors for commodities, raised margin requirements for gold, silver, and other metals in a notice posted to the exchange's website last week. These notices require traders to put up more cash on their bets in order to insure against the possibility that the trader will default when they take delivery of the contract.
Gold keeps a positive view, with bullish RSI momentum
Gold trades in positive territory on the day. According to the daily chart, the bullish outlook of the precious metal remains intact as the price holds above the key 100-day Exponential Moving Average (EMA), while the Bollinger Bands widen. The path of least resistance is to the upside, with the 14-day Relative Strength Index (RSI) pointing higher above the midline. This displays the upward momentum in the near term.
The first upside barrier for XAU/USD is seen at the upper boundary of the Bollinger Band of $4,520. Green candlesticks and steady action above this level could set the price up for a run toward the all-time high of $4,550, en route to the $4,600 psychological mark.
On the other hand, the initial support level for Gold emerges in the $4,305-$4,300 region, representing the December 29 low and round figure. A stronger pullback could drag the yellow metal toward the December 16 low of $4,271.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- EUR/JPY holds steady around 183.80 in Wednesday’s early European session.
- The cross keeps the positive view in the longer term, with a bullish RSI momentum indicator.
- The immediate resistance level is seen at 185.25; the additional downside filter to watch is 182.95.
The EUR/JPY cross trades on a flat note near 183.80 during the early European session on Wednesday. Earlier this week, the Bank of Japan’s (BoJ) December meeting "Summary of Opinions" showed several board members advocating for a continued tightening path and additional rate hikes in 2026. The Japanese Yen (JPY) initially strengthened against the Euro (EUR) following the report. However, traders have been disappointed with the slow and cautious pace of the BoJ’s monetary tightening, which might cap the upside for the JPY.
On the other hand, the European Central Bank (ECB) held interest rates steady in December and hinted that they are likely to remain unchanged for a period. The money markets have priced in for a 25 bps interest rate cut by the ECB in February 2026, currently remaining below 10%. Financial markets are expected to trade on thin volumes later in the day. Japanese markets are closed for the rest of the week, and most markets closed on Thursday for the New Year's Day holiday.
Technical Analysis:
In the daily chart, EUR/JPY preserves an uptrend above the rising 100-day EMA at 177.80, which underpins the broader bullish bias. Pullbacks would need to hold above this average to maintain upward traction.
Price hovers just below the upper Bollinger Band, with bands gently widening and pointing higher, signaling firm bullish pressure. RSI prints 61.05 and edges up from 60.87, confirming positive momentum without overbought conditions. Immediate resistance stands at the upper band at 185.25, while support aligns at the middle band at 182.95, with a deeper cushion at the lower band at 180.65. A daily close above resistance would pave the way for continuation, whereas a rejection could trigger consolidation toward the midline.
(The technical analysis of this story was written with the help of an AI tool)
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.
- GBP/USD may rebound above the nine-day EMA of 1.3462.
- The 14-day Relative Strength Index remains positive at 61.0 and is not overbought.
- Further declines would open the way toward the 50-day EMA at 1.3351.
GBP/USD remains subdued for the second consecutive day, trading around 1.3460 during the Asian hours on Wednesday. The technical analysis of the daily chart indicates a weakening of a bullish bias as the pair is positioned slightly below the lower boundary of the ascending channel pattern.
The nine-day Exponential Moving Average (EMA) trends above the 50-day EMA, preserving a bullish bias. The GBP/USD pair hovers just beneath the short-term average while holding well above the rising medium-term average, signaling ongoing trend support. Additionally, the 14-day Relative Strength Index (RSI) at 61.0 stays positive and is not overbought.
A rebound above the nine-day EMA of 1.3462 would lead the GBP/USD pair to target the three-month high of 1.3534, reached on December 24. A daily close above 1.3534 could open a move toward the upper boundary of the ascending channel around 1.3690.
A pullback below the short-term average and the channel would expose the 50-day EMA at 1.3351 as first trend support and temper upside momentum. Further declines would put downward pressure on the GBP/USD pair to navigate the region around the eight-month low of 1.3010.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.02% | 0.09% | 0.01% | 0.05% | 0.26% | 0.03% | |
| EUR | -0.06% | -0.05% | 0.04% | -0.05% | -0.01% | 0.19% | -0.03% | |
| GBP | -0.02% | 0.05% | 0.08% | -0.00% | 0.03% | 0.24% | 0.03% | |
| JPY | -0.09% | -0.04% | -0.08% | -0.07% | -0.04% | 0.17% | -0.03% | |
| CAD | -0.01% | 0.05% | 0.00% | 0.07% | 0.03% | 0.22% | 0.05% | |
| AUD | -0.05% | 0.01% | -0.03% | 0.04% | -0.03% | 0.21% | -0.01% | |
| NZD | -0.26% | -0.19% | -0.24% | -0.17% | -0.22% | -0.21% | -0.21% | |
| CHF | -0.03% | 0.03% | -0.03% | 0.03% | -0.05% | 0.00% | 0.21% |
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).
Chinese President Xi Jinping said that he will implement more proactive macroeconomic policies, Reuters reported on Wednesday. Xi added that he will promote the economy to achieve effective qualitative improvement and reasonable quantitative growth.
Key quotes
To implement more proactive macroeconomic policies.
Maintain social harmony and stability.
Will promote the economy to achieve effective qualitative improvement and reasonable quantitative growth.
Market reaction
At the time of writing, the AUD/USD pair is trading around 0.6690, down 0.04% on the day.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- USD/JPY gains to near 156.60 as the US Dollar rises despite dovish FOMC minutes.
- Fed policymakers seek to return to neutral policy stance to support labor market.
- BoJ officials signaled that the monetary policy will remain on the upward path.
The USD/JPY pair trades 0.2% higher to near 156.60 during the late Asian trading session on Wednesday. The pair gains as the US Dollar (USD) trades higher, following the release of the Federal Open Market Committee (FOMC) minutes of the December policy meeting showed on Tuesday.
At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises to near 98.30, the highest level in a week.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.00% | 0.09% | 0.00% | 0.03% | 0.25% | 0.03% | |
| EUR | -0.06% | -0.04% | 0.04% | -0.05% | -0.03% | 0.20% | -0.03% | |
| GBP | -0.01% | 0.04% | 0.08% | -0.01% | 0.00% | 0.25% | 0.03% | |
| JPY | -0.09% | -0.04% | -0.08% | -0.08% | -0.06% | 0.17% | -0.04% | |
| CAD | -0.00% | 0.05% | 0.00% | 0.08% | 0.03% | 0.22% | 0.06% | |
| AUD | -0.03% | 0.03% | -0.00% | 0.06% | -0.03% | 0.23% | 0.00% | |
| NZD | -0.25% | -0.20% | -0.25% | -0.17% | -0.22% | -0.23% | -0.22% | |
| CHF | -0.03% | 0.03% | -0.03% | 0.04% | -0.06% | -0.01% | 0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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 attracts bids even as FOMC minutes showed that officials stressed the need for further interest rate cuts, citing United States (US) labor market risks.
Most participants noted moving toward a more neutral policy stance would help forestall possible job market deterioration,” FOMC minutes.
Fed policymakers have argued in favor of easing the monetary policy further despite reducing interest rates by 75 basis points (bps) to 3.50%-3.75% in 2025.
According to the CME FedWatch tool, the Fed will cut interest rates by at least 50 basis points (bps) in 2026.
Meanwhile, the Japanese Yen (JPY) faces selling pressure as traders doubt that the Bank of Japan (BoJ) will tighten its monetary policy in the near-term, given government’s support for higher fiscal spending to stimulate economic growth. However, BoJ officials have stated that there will be more interest rate cuts as firms’ behaviour on pay and wage growth appears to be changing.
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.
- USD/INR trades flat at open around 90.20 in a thin trading volume day.
- FIIs turned out to be net sellers in nine months of 2025.
- Fed officials support more interest rate cuts to support US job market.
The Indian Rupee opens on a flat note against the US Dollar (USD) on the last trading day of 2025. The USD/INR pair wobbles around 90.20 as trading volume remains thin globally in the final stretch of the year. However, the outlook of the pair remains firm as interest of overseas investors toward the Indian stock market remains grim due to trade stalemate between the United States (US) and India.
This year, Foreign Institutional Investors (FIIs) remained net sellers in almost nine months, and offloaded stake worth Rs. 30,752.24 crore. So far in December, FIIs have pared stake worth Rs. 30,752.24 crore.
In 2025, trade relations between the US and India remained sour as Washington raised tariffs on imports from New Delhi to 50%, which included 25% punitive import duty for buying Oil from Russia.
Meanwhile, the US Dollar (USD) trades slightly higher in Asian trading hours, even as most Federal Reserve (Fed) officials have stressed the need for further monetary easing to support the US labor market.
“Most participants noted moving toward a more neutral policy stance would help forestall possible job market deterioration,” Federal Open Market Committee (FOMC) minutes of the December policy meeting showed on Tuesday.
In 2026, the major highlight for the FX market is expected to be the announcement of new Fed Chair by US President Donald Trump. On Monday, Trump said that he will announce Chairman Jerome Powell’s successor sometime in January.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Last release: Tue Dec 30, 2025 19:00
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
- Australian Dollar holds ground following China’s Manufacturing Purchasing Managers' Index data.
- China’s Manufacturing PMI rose to 50.1 in December, beating the 49.2 prior reading and market expectations.
- December FOMC Minutes showed most participants favored pausing further rate cuts if inflation continues to decline.
The Australian Dollar (AUD) inches higher against the US Dollar (USD), holding ground for the second successive session. Volumes are expected to be thin due to the New Year's holiday in Australia.
The AUD/USD pair moves little following the release of China’s official Manufacturing Purchasing Managers' Index (PMI), which rose to 50.1 in December, compared to 49.2 in the previous reading. The reading came in above the market consensus of 49.2 in the reported month. The NBS Non-Manufacturing PMI climbed to 50.2 in December versus November’s 49.5 figure. The market forecast was for a 49.8 print.
China's RatingDog Manufacturing Purchasing Managers' Index climbed to 50.1 in December from 49.9 in November, the latest data published by RatingDog showed on Wednesday.
The AUD finds support amid growing expectations of interest rate hikes from the Reserve Bank of Australia (RBA). RBA Governor Michele Bullock said earlier that although the board did not explicitly consider a rate hike, it discussed the conditions under which interest rates might need to increase in 2026.
The RBA December Meeting Minutes indicated that policymakers stand ready to tighten policy if inflation fails to ease as expected, placing increased focus on the Q4 CPI report due January 28. Analysts note that a stronger-than-expected Q4 core inflation reading could trigger a rate hike at the RBA’s February 3 meeting.
US Dollar gains following FOMC Meeting Minutes
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is holding ground after registering modest gains in the previous session. The DXY is trading around 98.20 at the time of writing.
- Federal Open Market Committee (FOMC) December Meeting Minutes, released on Tuesday, revealed that most participants judged that it would likely be appropriate to stand on further rate cuts if inflation declined over time. Meanwhile, some Fed officials said it might be best to leave rates unchanged for a while after the committee made three rate reductions this year to support the weakening labor market.
- The CME FedWatch tool shows an 85.1% probability of rates being held at the Fed’s January meeting, up from 83.4% a day earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has fallen to 14.9% from 16.6% a day ago.
- The Fed lowered interest rates by 25 basis points (bps) at the December meeting, bringing the target range to 3.50%–3.75%. The Fed delivered a cumulative 75 bps of rate cuts in 2025 amid a cooling labor market and still-elevated inflation.
- US Initial Jobless Claims declined to 214K from 224K in the prior week, beating the 223K market forecast. Meanwhile, Continuing Jobless Claims rose to 1.923 million from 1.885 million, while the four-week average of Initial Claims edged lower to 216.75K from 217.5K.
- Australia’s headline inflation rose to 3.8% in October 2025 from 3.6% in September, remaining above the RBA’s 2–3% target range. As a result, markets are increasingly pricing in a rate hike as early as February 2026, with both the Commonwealth Bank of Australia and National Australia Bank projecting a rise to 3.85% at the RBA’s first policy meeting of the year.
- Australia’s Consumer Inflation Expectations 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.
Australian Dollar tests 0.6700 barrier amid persistent bullish bias
AUD/USD is trading around 0.6690 on Wednesday. The technical analysis of the daily chart indicates that the pair remains within the ascending channel pattern, suggesting a persistent bullish bias. The pair holds above the rising nine-day Exponential Moving Average (EMA), keeping the short-term uptrend intact. The average has firmed across recent sessions, reinforcing dip-buying interest. The 14-day Relative Strength Index (RSI) at 64.8 (bullish) and edges higher, still short of overbought.
The AUD/USD pair is testing the immediate barrier at the psychological level of 0.6700, followed by 0.6727, the highest level since October 2024, reached on December 29. Further advances above the latter would support the pair to explore the region around the upper boundary of the ascending channel at 0.6850.
On the downside, the initial support lies at the nine-day EMA of 0.6684, aligned with the lower ascending channel boundary around 0.6680. A break below the channel would open the door for the AUD/USD pair to navigate the region around the six-month low near 0.6414, marked on August 21.
(The technical analysis of this story was written with the help of an AI tool.)
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.03% | 0.06% | -0.00% | 0.00% | 0.20% | 0.00% | |
| EUR | -0.06% | -0.03% | 0.00% | -0.07% | -0.06% | 0.13% | -0.06% | |
| GBP | -0.03% | 0.03% | 0.04% | -0.04% | -0.03% | 0.16% | -0.02% | |
| JPY | -0.06% | 0.00% | -0.04% | -0.07% | -0.06% | 0.13% | -0.04% | |
| CAD | 0.00% | 0.07% | 0.04% | 0.07% | 0.00% | 0.18% | 0.05% | |
| AUD | -0.00% | 0.06% | 0.03% | 0.06% | -0.01% | 0.19% | 0.00% | |
| NZD | -0.20% | -0.13% | -0.16% | -0.13% | -0.18% | -0.19% | -0.18% | |
| CHF | -0.00% | 0.06% | 0.02% | 0.04% | -0.05% | -0.01% | 0.18% |
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).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Gold prices remained broadly unchanged in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 12,553.34 Indian Rupees (INR) per gram, broadly stable compared with the INR 12,541.37 it cost on Tuesday.
The price for Gold was broadly steady at INR 146,425.10 per tola from INR 146,280.10 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,553.34 |
10 Grams | 125,540.10 |
Tola | 146,425.10 |
Troy Ounce | 390,466.40 |
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.)
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