Forex News

• Silver rises 0.85% on Tuesday, trading near $58.60 as markets adopt a wait-and-see stance ahead of the Fed.
• Markets largely expect a 25-basis-point rate cut on Wednesday, reinforcing demand for non-yielding assets.
• Signs of a cooling US labor market and cautious remarks from Fed officials strengthen expectations of further monetary easing.

Silver (XAG/USD) stabilises around $58.60 on Tuesday, up 0.85% on the day, as investors hold their breath ahead of the Federal Reserve’s (Fed) monetary policy decision due on Wednesday. The white metal remains stuck in a consolidation phase, a typical behavior when markets anticipate a decisive signal on US interest rates.

Market consensus remains strongly tilted toward a 25-basis-point rate cut, a scenario that is almost fully priced in according to the CME FedWatch tool. Expectations of additional monetary easing are boosting demand for Silver, a non-yielding asset particularly sensitive to real interest-rate movements.

These dovish expectations have been reinforced by the gradual deterioration of the US labor market. Several recent indicators, including weaker hiring momentum and signs of softer labor demand highlighted by Fed officials, have strengthened the case for additional easing. John Williams, President of the Federal Reserve Bank of New York, noted in late November that economic growth had slowed and that labor-market conditions were cooling, adding that further adjustment was likely needed. His cautious tone helped fuel market bets on a more accommodative stance in the near term.

In this environment, the broader sense of caution in financial markets also supports precious metals. Silver benefits from hedging flows in an environment where economic signals are becoming more mixed and investors prepare for a possible revision of the interest-rate outlook for 2026.

Wednesday’s meeting will be decisive. If the Fed confirms a rate cut accompanied by a cautious message, Silver may remain supported or even extend its advance. Conversely, a firmer tone on the future path of interest rates, a 'hawkish cut', could limit the metal’s short-term upside potential.

• EUR/CHF holds near a three-month high as CHF weakness persists ahead of the SNB interest rate announcement.
• Markets widely expect the SNB to keep rates unchanged at 0.00%.
• ECB officials strike a steady tone, reinforcing expectations for unchanged rates on December 18.

The Euro (EUR) trades on the back foot against the Swiss Franc (CHF) on Tuesday, with EUR/CHF consolidating near its strongest level in more than three months as the Franc remains under sustained pressure ahead of Thursday’s Swiss National Bank (SNB) monetary policy announcement.

At the time of writing, the cross is trading around 0.9380, holding close to Monday’s peak, its highest level since September 5.

Markets widely expect the SNB to keep interest rates unchanged at 0.00% this week, maintaining the status quo for a third consecutive meeting. According to a Reuters poll, 38 of 40 economists forecast no change at the December 11 decision, while just two anticipate a return to -0.25%. Reuters also reported that 21 of 25 economists expect the policy rate to stay at 0.00% through end-2026, with only a few anticipating any cut next year.

At its September meeting, the SNB signalled confidence in its current policy stance, noting that inflation had eased toward the lower end of its 0-2% target band and that existing settings remained appropriate.

Policymakers also reiterated that the bar for returning to negative interest rates is high, even as the Franc’s strength and softer domestic momentum have reduced inflation pressures. The central bank maintained its guidance that inflation is likely to edge slightly higher in the coming quarters.

On the Euro side, the European Central Bank (ECB) is set to deliver its interest rate decision on December 18, where policymakers are also expected to keep rates unchanged. Recent ECB minutes showed unanimous backing for leaving all three key policy rates steady in October, with the Governing Council describing the current stance as “in a good place.” Officials also highlighted the value of waiting for December’s updated projections before considering any further adjustments.

Remarks on Monday reinforced the steady policy message. ECB’s Peter Kazimir said he sees “no reason to change rates in the coming months, definitely not in December,” adding that reacting to small deviations in inflation would risk introducing unnecessary policy uncertainty.

Separately, in a Bloomberg interview published Monday, Isabel Schnabel said she is “rather comfortable” with expectations that the ECB’s next move could eventually be a hike, although she stressed that any such step is not imminent.

Private sector employment expanded over the latest month, with companies adding an average of 4,750 jobs per week in the four weeks ending November 22, according to data released Tuesday by Automatic Data Processing (ADP).

Market reaction

The US Dollar (USD) trades mostly unchanged just above the 99.00 region as gauged by the US Dollar Index (DXY), amid broad-based consolidation ahead of the FOMC event on Wednesday.

(This story was corrected on December 9 at 18:49 to reflect that the employment report goes through November 22, not 15)

• The has lost steam against the US Dollar, and remains hovering below 1.1650.
• The Dollar holds onto Monday's gains, buoyed by higher US Treasury yields.
• A previous trendline support is holding EUR/USD bulls on Tuesday.

EUR/USD has turned negative on the daily chart after failing to return above 1.1650 and is trading at 1.1635 at the time of writing. Recent price action reveals a hesitant market, with investors reluctant to place large US Dollar bets ahead of the Federal Reserve's monetary policy decision on Wednesday.

Futures markets are pricing a nearly 90% chance that the US central bank will cut rates by 25 basis points after their two-day meeting, according to the CME Group's Fedwatch Tool. The main attraction of the event will be the tone of the monetary policy statement, the potential changes in the interest rate projections (the dot plot), and Chairman Jerome Powell's press conference for a better assessment of what comes next.

Before that, the US weekly ADP Employment Change report and the JOLTS Job Openings will provide valuable insight into the health of the US labour market, which might be of particular relevance this time as November's Nonfarm Payrolls report will not be released until next week.

Daily Digest Market Movers: The Dollar treads water ahead of the Fed

• The US Dollar (USD) broadly holds onto Monday's gains, which were buoyed by higher US Treasury yields and risk-aversion after news of an earthquake in Japan. Overall, the US Dollar Index (DXY) has remained moving sideways near six-week lows at the 98.75 area.
• Investors are looking from the sidelines, awaiting Wednesday's Fed meeting to provide further clues about the bank's path forward. Chairman Jerome Powell is expected to strike a hawkish note after the meeting, hinting at a pause over the coming months, but the wide division within the committee and speculation that the White House advisor Kevin Hassett will replace him in May, are likely to keep hopes of further monetary easing alive.
• A 7.5-magnitude earthquake hit the north of Japan on Monday, prompting authorities to evacuate thousands of residents and launching a tsunami warning that, later on, was downgraded to an advisory. The first official data from the Japanese government says that 13 people have been injured, but figures are still tentative.
• US President Donald Trump added pressure on the Fed in an interview in Publico, calling Chairman Powell "not a smart person" for not lowering borrowing cost faster and assured that the support for "immediately slashing interest rates" will be a litmus on the election of the next Fed Chair.
• During the US session on Tuesday, the focus will be on the US JOLTS Job Openings data from both September and October, which are expected to have remained broadly steady, with 7.2 million openings in both months, following the 7.22 million seen in August.
• In the Eurozone, the only event worth noting on Tuesday will be a speech by Bundesbank President and ECB Council member, Joachim Nagel, who is likely to reiterate that the bank is in a good place and that monetary policy will remain unchanged for some time.
• Data released on Monday revealed that the Eurozone Sentix Investors Sentiment Index improved in December to -6.2 from -7.4 in November. The index measuring investors' sentiment about the current economic situation rose to -16.5 from -17.5 in the previous month, with the economic expectations showing the largest improvement, to 4.8, from 3.3 in November. The impact on the Euro, however, was marginal.
• ECB board member Isabel Schnabel affirmed earlier on Monday that she feels comfortable with investors' bets that the central bank's next move will be a rate hike, but the Latvian Central Bank Governour and ECB board member Martins Kazaks denied that the rate hike might come in December.

Technical Analysis: EUR/USD dropped above trendline support

EUR/USD maintains its bullish trend from mid-November lows intact, but Monday's decline led prices to trade below the trendline support, which is a sign of weakness. Technical indicators are also turning lower: the 4-hour Relative Strength Index (RSI) has pulled back below the key 50 level, and the Moving Average Convergence Divergence (MACD) keeps trending lower underneath the signal line.

Failure to regain the mentioned trendline, now at 1.1650, is likely to increase pressure towards Monday's low at 1.1616 ahead of the December 1 and 2 lows around 1.1590 and the November 26 and 28 lows in the 1.1550-1.1555 area.

A bullish move above 1.1650, on the contrary, would bring the December 4 high at around 1.1680 into focus. Further up, the next target is the October 17 high, near 1.1730.

• The Australian Dollar climbs around 0.6640, supported by the RBA’s firm stance.
• Expectations of further Federal Reserve rate cuts weigh on the US Dollar.
• Diverging monetary policy paths between the RBA and the Fed strengthen the Aussie’s appeal.

AUD/USD trades around 0.6640 on Tuesday, up 0.20% on the day at the time of writing. The pair remains supported by the momentum generated by the Reserve Bank of Australia (RBA) after firm comments from its Governor, Michele Bullock, who stated that no further rate cuts appeared necessary and that the board had even discussed conditions under which a rate hike could be required. This perspective reduces the likelihood of additional monetary easing in Australia and helps anchor the Australian Dollar (AUD) on a constructive trajectory.

The broader international backdrop also supports the move. The US Dollar (USD) continues to weaken amid rising expectations of additional interest rate cuts from the Federal Reserve (Fed), as recent US indicators reflect a gradual slowdown in economic momentum and labour market conditions. The Personal Consumption Expenditures (PCE) report published on Friday confirmed core inflation at 2.8% YoY, matching expectations but still above the Fed’s medium-term target, leaving room for further accommodation.

According to the CME FedWatch tool, markets now assign nearly a 90% chance to a 25-basis-point cut at Wednesday’s meeting, weighing on US Dollar demand. However, investors remain cautious ahead of the Fed decision, and the ADP and JOLTS reports due later in the day are also expected to help refine market expectations regarding labour market conditions.

In contrast, Australia’s monetary outlook appears more restrictive than that of the United States (US). Inflation remains above the RBA’s 2%-3% target range, limiting the central bank’s room to ease further. An environment that could lead to renewed tightening in 2026 if price pressures persist.

The coming days will bring key catalysts for the AUD. Australia’s November labour market report, due Thursday, is expected to show around 20K new jobs, compared with 42.2K previously, with the Unemployment Rate seen edging up to 4.4%. These figures will be closely monitored given their strong influence on the RBA’s policy outlook.

Overall, the widening divergence between the RBA and the Fed, combined with supportive risk sentiment and a softer US Dollar, continues to benefit the Aussie, while AUD/USD attempts to consolidate its advance around 0.6640.

AUD/USD Technical Analysis

In the 4-hour chart, AUD/USD trades at 0.6638, little changed on a daily basis and 12 pips above the day opening price. The 100-period Simple Moving Average (SMA) rises steadily and sits at 0.6534, below the market and acting as dynamic support. Price holds above this rising SMA, reinforcing the near-term bullish bias. The ascending trend line from 0.6437 underpins the advance, keeping the pair supported.

The Relative Strength Index (RSI) stands at 65, above the 50 midline and not overbought, confirming firm bullish momentum. Immediate resistance aligns at 0.6650, followed by 0.6707, while support is seen at 0.6609. A push through 0.6650 could expose 0.6707, whereas a drop below 0.6609 would open the door toward the rising SMA. The intraday tone stays constructive as long as the pair holds above support.

(The technical analysis of this story was written with the help of an AI tool)

• The US Dollar holds gains above 0.8050 against the CHF with the Fed and the SNB in focus.
• The Fed is expected to cut interest rates on Wednesday and hint at a pause afterwards.
• The SNB is set to keep rates on hold at 0% and play down speculation about negative borrowing costs.

The US Dollar nudges lower against the Swiss Franc on Tuesday, but is holding most of the gains taken over the last few days. The pair is trading at 0.8065 at the time of writing, with downside attempts contained above 0.8050 so far, and all eyes on the Federal Reserve (Fed) and the Swiss National Bank (SNB) monetary policy decisions, due late this week.

A quarter-point interest rate cut by the Fed on Wednesday is practically discounted, and the US Dollar is drawing some support from investors’ expectations that Chairman Jerome Powell will deliver a hawkish message, dampening hopes of further easing in the near-term.

US President Donald Trump has not missed the opportunity of putting some pressure on the central bank, and stated that the new Fed Chair should support interest rate cuts, in an interview with Politico earlier on Tuesday. The impact on the US Dollar, however, has been minimal.

Later on Tuesday, the ADP will release its weekly Employment Change report, and the US Labour Department will follow suit with the delayed JOLTS Job Openings from September and October. The market is bracing for steady 7.2 million openings in both months, slightly below the 7.22 million seen in August.

On Thursday, the SNB will, most likely, leave its benchmark interest rate steady at the current 0% level, as inflation remains at levels near zero. In the Press conference,  SNB Chairman Martin Schlegel is likely to play down the possibility of negative interest rates. Any doubts on that point might send the Swiss Franc tumbling against its main peers.