Forex News
- AUD/USD wobbles around 0.6660 as rally hits pause after weak Australian employment data.
- Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.
- The Fed has lowered interest rates this year due to weak job market conditions.
The AUD/USD pair turns sideways as the three-week rally hits a pause after posting a fresh three-month high at 0.6686 on Wednesday. During Friday’s early European trading hours, the Aussie pair trades calmly near 0.6660.
Australian Dollar Price This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.81% | -0.51% | 0.30% | -0.43% | -0.45% | -0.73% | -1.16% | |
| EUR | 0.81% | 0.33% | 1.15% | 0.42% | 0.40% | 0.12% | -0.33% | |
| GBP | 0.51% | -0.33% | 0.86% | 0.09% | 0.08% | -0.21% | -0.65% | |
| JPY | -0.30% | -1.15% | -0.86% | -0.72% | -0.73% | -1.00% | -1.44% | |
| CAD | 0.43% | -0.42% | -0.09% | 0.72% | -0.01% | -0.29% | -0.74% | |
| AUD | 0.45% | -0.40% | -0.08% | 0.73% | 0.01% | -0.29% | -0.72% | |
| NZD | 0.73% | -0.12% | 0.21% | 1.00% | 0.29% | 0.29% | -0.44% | |
| CHF | 1.16% | 0.33% | 0.65% | 1.44% | 0.74% | 0.72% | 0.44% |
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).
The pair struggles to extend its advance after the release of the unexpectedly weak Australian labor market data for November. The data released on Thursday showed that the economy shed 21.3K jobs in November, while it was expected to have added 20K fresh workers, raising concerns over the labor market strength.
Meanwhile, investors shift their focus to the United States (US) Nonfarm Payrolls (NFP) data for November, which will be released on Tuesday.
Investors will pay close attention to the US NFP data as its impact on market expectations for the Federal Reserve’s (Fed) monetary policy outlook is expected to be high. In the last three monetary policy meetings, the Fed has lowered interest rates by 100 basis points (bps) to 3.50%-3.75%, citing downside risks to employment.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades with caution near its seven-week low of 98.13 posted on Thursday.
AUD/USD technical analysis
AUD/USD trades stably near 0.6660 in the early European session on Friday. The pair holds above a rising 20-Exponential Moving Average (EMA), now at 0.6588, which supports the bullish bias. The 20-day EMA has been ascending for several sessions and continues to guide the trend higher.
The 14-day Relative Strength Index (RSI) at 67 (bullish, near overbought) confirms firm momentum while edging toward a stretch where gains could slow.
With momentum elevated, bulls retain control, though the proximity to overbought conditions could temper follow-through and encourage consolidation. A pullback would be expected to find demand on approaches to the rising average, while a close below it would open room for a broader corrective phase towards the November 14 high of 0.6551; otherwise, the broader bias would remain upward as long as price action respects the trend proxy. Looking up, the advance could extend towards the September 17 high of 0.6707.
(The technical analysis of this story was written with the help of an AI 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.
- EUR/JPY trades with mild gains around 182.75 in Friday’s early European session.
- The cross maintains the positive view with strong RSI momentum.
- The immediate resistance level emerges at 182.82; the initial support level is located at 181.18.
The EUR/JPY cross posts modest gains near 182.75 during the early European session on Friday. The Japanese Yen (JPY) softens against the Euro (EUR) as traders remain worried about Japan's deteriorating fiscal condition on the back of Prime Minister Sanae Takaichi's massive spending plan and sluggish economic growth. The final reading of the German Harmonized Index of Consumer Prices (HICP) will be released later on Friday.
The Bank of Japan (BoJ) interest rate decision will take center stage next week. Rising bets for an imminent rate hike by the Japanese central bank could support the JPY and act as a headwind for the cross. According to a December 2-9 Reuters poll, 90% of economists expected the BoJ to raise short-term interest rates to 0.75% from 0.50% at the December meeting. This is a significant increase over the last Reuters survey conducted last month, which only had 53%.
Technical Analysis:
In the daily chart, EUR/JPY trades at 182.75. It stands well above the rising 100-day EMA at 175.89, keeping the broader uptrend intact. The positive slope of the average supports continuation even as the distance from the mean increases. RSI at 68.85 sits near overbought, signaling strong momentum that could temper if price consolidates.
Price hovers near the upper Bollinger Band at 182.82, indicating persistent bullish pressure with stretched conditions emerging. The bands have narrowed from prior wide readings and are beginning to widen modestly, pointing to improving directional energy. A pullback would guide toward the middle band at 181.18, while deeper weakness could find support at the lower band at 179.53. A daily close above the band could open the path to fresh highs.
(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.
- The Indian Rupee falls to near 90.86 against the US Dollar amid uncertainty surrounding the US-India trade deal.
- So far, FIIs have remained net sellers on all trading days of December.
- Investors await India’s retail CPI and the US NFP data for November.
The Indian Rupee (INR) extends its decline against the US Dollar (USD) on Friday, with the USD/INR pair hitting fresh all-time highs at 90.86. The Indian currency continues to underperform its peers as investors remain anxious over whether the United States (US) and India will reach a trade deal in the near term.
No major outcome has come out of the two-day meeting between Deputy US Trade Representative Rick Switzer and his team, and top negotiators from India, keeping uncertainty over the US-India trade deal intact.
A slight optimism built on the US-India trade pact outlook on Wednesday when US Trade Representative Jamieson Greer stated, while testifying before the Senate Appropriations Committee, that the latest offer by New Delhi is the "best ever" the US has seen, while keeping the claim that India is a “tough nut to crack”. However, sentiment over the Indian Rupee is expected to remain bogged down unless a deal is announced.
On comments by US Trade Representative Greer, Commerce and Industry Minister Piyush Goyal stated on Thursday that Washington should sign the bilateral deal if it is very happy with the offer. "His happiness is very much welcome. And, I do believe that if they are very happy, they should be signing on the dotted lines,” Goyal said, PTI reported.
It seems that the Indian equity market will continue to witness outflows from overseas investors unless a trade deal between the US and India is announced. Foreign Institutional Investors (FIIs) have remained net sellers so far in all trading days of December, and have offloaded stake worth Rs. 18,491.29 crore.
Daily digest market movers: US Dollar outperforms Indian Rupee ahead of India’s retail CPI data
- The Indian Rupee underperforms the US Dollar even as the latter is expected to close in red for the third straight week. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, strives to regain ground after posting a fresh seven-week low of 98.13 on Thursday.
- The US Dollar has been under pressure since Wednesday when the Federal Reserve (Fed) ruled out the possibility of a pause in the ongoing monetary-easing campaign despite inflationary pressures remaining well above the 2% target.
- The Fed’s dot plot showed that policymakers collectively see the Federal Fund Rate heading to 3.4% by the end of 2026, signaling that there will be one interest rate cut next year. However, Fed Chair Jerome Powell clarified that the bar of another interest rate cut is very high, and we are close to the upper range of neutrality, a level that neither stimulates nor restricts the economy.
- Before the monetary policy announcement, market participants anticipated the Fed to signal that it is done with trimming interest rates, following a 25-basis-point (bps) reduction to 3.50%-3.75%.
- Going forward, investors will pay close attention to the US Nonfarm Payrolls (NFP) data for fresh cues on the interest rate outlook. The impact of the official employment data will be significant on market expectations for the Fed’s monetary policy outlook, as the central bank has reduced borrowing rates in its last three meetings due to downside labor market risks.
- In Friday’s session, the USD/INR pair will be influenced by India’s retail Consumer Price Index (CPI) data for November, which will be published at 10:30 GMT. India’s retail inflation is expected to have grown by 0.7% on an annualized basis, faster than 0.25% in October.
Technical Analysis: USD/INR approaches 91.00
In the daily chart, USD/INR trades at 90.6885. The 20-day Exponential Moving Average (EMA) at 89.8183 rises and stays beneath the spot price, keeping the short-term uptrend intact and supporting dip-buying interest.
Price action remains above the moving average, suggesting the advance is being tracked by trend followers.
The 14-day Relative Strength Index (RSI) at 69.27 edges toward overbought, confirming firm bullish momentum while hinting at risk of fatigue on further gains.
The bias stays firm as long as USD/INR holds above the rising 20-day EMA, with pullbacks expected to be absorbed near the average. A decisive break above the fresh all-time high of 90.86 could lead to further advancement towards 92.00.
RSI hovering just below 70 signals strong but stretched momentum; a push above 70 could trigger consolidation, while sustained readings below that threshold would maintain an orderly grind higher. A daily close back under the 20-day EMA would soften the tone and open room for a deeper retracement towards the December 1 low at 89.51.
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
(The technical analysis of this story was written with the help of an AI tool)
- GBP/JPY regains positive traction on Friday amid the emergence of some selling around the JPY.
- Concerns about Japan’s public finance and a positive risk tone undermine the safe-haven JPY.
- The divergent BoJ-BoE outlooks warrant caution for bulls ahead of important UK macro releases.
The GBP/JPY cross attracts fresh buyers following the previous day's modest decline and climbs back above mid-208.00s during the Asian session on Friday. Spot prices remain close to the highest level since August 2008, touched earlier this week, as traders now look forward to the UK data dump for a fresh impetus.
The UK Office for National Statistics (ONS) will publish the monthly GDP report and Industrial Production figures later today. The data will influence the British Pound (GBP) and produce short-term trading opportunities around the GBP/JPY cross. In the meantime, a combination of factors undermines the Japanese Yen (JPY) and might continue to act as a tailwind for spot prices.
Investors remain worried about Japan's deteriorating fiscal condition on the back of Prime Minister Sanae Takaichi's massive spending plan. Apart from this, the prevalent risk-on environment – as depicted by a generally positive tone around the equity markets – is seen weighing on safe-haven assets, including the JPY, which, in turn, offer some support to the GBP/JPY cross.
The downside for the JPY, however, remains cushioned in the wake of firming expectations for an imminent interest rate hike by the Bank of Japan (BoJ) as early as next week. This marks a significant divergence in comparison to bets that the Bank of England (BoE) will lower borrowing costs at its policy meeting next Thursday, which should cap any further gains for the GBP/JPY cross.
Heading into the key central bank event risks, trades next week will also confront the release of important UK macro data – including monthly employment details, the latest consumer inflation figures, and flash PMIs. This, in turn, warrants some caution before placing fresh bullish bets around the GBP/JPY cross and positioning for an extension of over a one-month-old uptrend.
Economic Indicator
Industrial Production (MoM)
The Industrial Production index, released by the Office for National Statistics on a monthly basis, measures movements in the volume of output for UK production industries: manufacturing, mining and quarrying, energy supply, and water and waste management. . Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Next release: Fri Dec 12, 2025 07:00
Frequency: Monthly
Consensus: 0.7%
Previous: -2%
Source: Office for National Statistics
- EUR/USD softens to around 1.1735 in Friday’s early European session.
- The major pair loses ground on firmer USD, but expectations of Fed rate cuts next year might cap its downside.
- ECB’s Lagarde said policy is in a good place and that the bank could update its projections in December.
The EUR/USD pair retreats from a 10-week high to near 1.1735 during the early European session on Friday, pressured by a modest rebound in the US Dollar (USD). The potential downside for the major pair might be limited amid the prospect of the US Federal Reserve (Fed) rate cuts next year. The final reading of the German Harmonized Index of Consumer Prices (HICP) will be released later on Friday.
The US central bank cut interest rates by 25 basis points (bps) at the conclusion of its two-day meeting on Wednesday, marking the central bank's third reduction of the year. Fed officials were split on the decision to lower rates to a range of 3.50%-3.75%, with policymakers dissenting on both sides. Comments from Fed Chair Jerome Powell were seen by traders as less hawkish than expected and exerted some selling pressure on the Greenback against the Euro (EUR).
Furthermore, renewed concerns about the Fed's independence under US President Donald Trump’s administration might contribute to the USD’s downside. Wall Street still views White House economic adviser Kevin Hassett as the most likely candidate to become the next Fed Chair. Analysts believe that Hassett is expected to push for more rate cuts.
Rising bets that the European Central Bank (ECB) is done cutting interest rates could support the shared currency in the near term. ECB President Christine Lagarde reiterated that the current monetary policy stance is in a good position. Meanwhile, ECB policymakers Francois Villeroy de Galhau and Gediminas Simkus stated that there is no immediate reason to either cut or raise rates, as the current policy stance is considered to be in a "good place”.
Traders will take more cues from the Fedspeak later in the day. Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee are scheduled to speak. Any hawkish remarks from Fed officials could help limit the USD’s losses in the near term.
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 prices fell in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 12,397.21 Indian Rupees (INR) per gram, down compared with the INR 12,422.55 it cost on Thursday.
The price for Gold decreased to INR 144,596.50 per tola from INR 144,894.20 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,397.21 |
10 Grams | 123,970.90 |
Tola | 144,596.50 |
Troy Ounce | 385,601.40 |
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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