Forex News
The Central Bank of Turkey (CBT) surprised markets with a 150bp cut to the policy rate, lowering it to 38% as headline inflation for November came in better than expected, ING's FX analyst Frantisek Taborsky notes.
Future Turkish rate moves to remain data-dependent
"At the last rate-setting meeting of this year, the Central Bank of Turkey delivered a larger rate cut of 150bp in comparison to the more cautious 100bp reduction at the October MPC. This followed a better-than-expected reading on headline inflation for November. The consensus was evenly balanced between 100bp and 150bp ahead of the meeting. The move pushes the policy rate down to 38% from 39.5% while the interest corridor remains unchanged at 450bp."
"While the bank emphasised that future rate decisions will remain data-driven and assessed on a meeting-by-meeting basis, it provided little clarity regarding near-term rate actions."
"In this context, inflation expectations, the outcome of the 2026 minimum wage negotiations, and the anticipated adjustment to automatic tax rates – promised by Finance Minister Mehmet Simsek – will be key for the outlook, alongside considerations regarding dollarisation and reserve levels, in our view."
The US Dollar (USD) continued to slide, pressured by a jump in initial jobless claims to 236k—the largest weekly rise since March 2020—and lingering softness in the labor market, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Market eyes November NFP and CPI for direction
"USD extended its decline, alongside the slippage in UST yields. Initial jobless claims rose by 44k to +236k, the biggest weekly increase since Mar-2020. While weekly data can be especially 'noisy' around holiday season (Thanksgiving, Christmas), the 4-week moving average did tick higher last week."
"This adds to the soft labour market narrative, where not only job creation is slowing but layoffs continue to pick up. Nov NFP and CPI reports to be released next week on 16 and 18 Dec, respectively will be closely scrutinised."
"A softer set of data should give USD bears further courage to test lower while Dec seasonality trend sets a favourable environment for USD bears. Since 2000, the month of December is weakest (average -1.07%) amongst the twelve calendar months and DXY fell on 17 out of 25 Decembers."
- 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.
On the domestic front, India's retail Consumer Price Index (CPI) data for November has come almost in line with expectations. Inflation at the retail level has come in at 0.7%, up from 0.25% in October.
The table below shows the percentage change of Indian Rupee (INR) against listed major currencies this week. Indian Rupee was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | INR | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.77% | -0.39% | 0.28% | -0.47% | -0.46% | 0.47% | -1.11% | |
| EUR | 0.77% | 0.42% | 1.10% | 0.34% | 0.37% | 1.44% | -0.30% | |
| GBP | 0.39% | -0.42% | 0.71% | -0.08% | -0.05% | 0.85% | -0.71% | |
| JPY | -0.28% | -1.10% | -0.71% | -0.74% | -0.73% | 0.23% | -1.37% | |
| CAD | 0.47% | -0.34% | 0.08% | 0.74% | 0.03% | 0.92% | -0.63% | |
| AUD | 0.46% | -0.37% | 0.05% | 0.73% | -0.03% | 0.90% | -0.66% | |
| INR | -0.47% | -1.44% | -0.85% | -0.23% | -0.92% | -0.90% | -1.74% | |
| CHF | 1.11% | 0.30% | 0.71% | 1.37% | 0.63% | 0.66% | 1.74% |
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 Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
Daily digest market movers: US Dollar underperforms on dovish Fed bets
- 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.
Technical Analysis: USD/INR holds key 20-day EMA
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.
(The technical analysis of this story was written with the help of an AI tool)
Indian economy FAQs
The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR.
India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee.
Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee.
India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.
- Silver consolidates above $64.00 after hitting a fresh all-time high at $64.62.
- Precious metals remain firm on Friday, with the US Dollar depressed.
- Technica indicators suggest that the XAG/USD rally migh be overstretched.
Silver’s (XAG/USD) appreciates for the fourth consecutive day on Friday, consolidating above the $64.00 level at the time of writing after having posted a fresh record high, at $64.62 earlier on the day.
Precious metals remain on a strong footing in a calm market session on Friday, with the US Dollar Index (DXY) pinned near two-month lows. The Fed’s monetary policy stance released on Wednesday has not altered investors’ bets for at least 50 basis points of further rate cuts over the next year, keeping the Greenback under pressure.
Technical Analysis: Silver has reached overbought levels
The pair looks overstretched after rallying more than 25% in the last three weeks. The 4-hour Relative Strength Index (RSI) is at 75, highlighting a bearish divergence, which should act as a warning for buyers. Price action, however, is not showing signs of a trend change so far.
Silver is struggling to consolidate above $64.00 at the moment of writing, with the next upside target at the mentioned $64.62 session high, and the top of the ascending channel, right above $65.00. Further up, the 261.8% Fibonacci extension of the December 9-10 uptrend is at $68.17.
Thursday’s
To the downside, the pair has found support at the $62.80 intraday level, with the next bearish target at Thursday’s low of $61.44. Further down, the confluence between the December 10 low, near $60.00, and the bottom of the ascending channel, now around $59.85, is a key area for bears.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- The Pound Sterling drops against its peers as the UK GDP declines by 0.1% for the second month in a row.
- Shrinking UK economic activity paves the way for a BoE interest rate cut on Thursday.
- Next week, investors will keenly focus on UK-US employment data.
The Pound Sterling (GBP) faces selling pressure against its major peers on Friday following the release of the United Kingdom (UK) Gross Domestic Product (GDP) data for October. The GDP report showed that the economic growth contracted again by 0.1%, missing expectations of a 0.1% expansion.
Weak UK GDP data defies the recent economic growth upgrade from the Office for Budget Responsibility (OBR), which raised GDP projections for the current year to 1.5% from the 1.0% anticipated in March.
The continuous decline in UK GDP is also expected to further boost expectations supporting an interest rate cut by the Bank of England (BoE) at next week's policy meeting. Traders have already priced in a 25-basis point (bps) interest rate reduction that would push key rates lower to 3.75%.
The GDP report also showed that Industrial Production increased by 1.1% in October on month, beating the estimates of 0.7%. In September, the economic data declined by 2%. On an annual basis, Industrial Production contracted by 0.8% against expectations of -1.2% and the prior reading of -2.5%. Meanwhile, Manufacturing Production came in lower at 0.5% against estimates of 1%, following a 1.7% decline in September.
Next week, a slew of UK data is lined up for release, such as the labour market data for the three months ending October, the Consumer Price Index (CPI) data for November, and the preliminary S&P Global Purchasing Managers’ Index (PMI) data for December, which will influence the Pound Sterling’s outlook.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.13% | 0.19% | -0.07% | -0.09% | -0.04% | 0.04% | |
| EUR | -0.09% | 0.04% | 0.11% | -0.15% | -0.18% | -0.13% | -0.05% | |
| GBP | -0.13% | -0.04% | 0.06% | -0.19% | -0.21% | -0.16% | -0.09% | |
| JPY | -0.19% | -0.11% | -0.06% | -0.22% | -0.25% | -0.21% | -0.12% | |
| CAD | 0.07% | 0.15% | 0.19% | 0.22% | -0.03% | 0.02% | 0.11% | |
| AUD | 0.09% | 0.18% | 0.21% | 0.25% | 0.03% | 0.05% | 0.13% | |
| NZD | 0.04% | 0.13% | 0.16% | 0.21% | -0.02% | -0.05% | 0.07% | |
| CHF | -0.04% | 0.05% | 0.09% | 0.12% | -0.11% | -0.13% | -0.07% |
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).
Daily digest market movers: US NFP to be next major trigger of US Dollar
- The Pound Sterling gives back its nominal intraday gains and flattens around 1.3385 against the US Dollar (USD) during the European trading session on Friday. The GBP/USD pair falls back after the release of the unexpectedly weak UK monthly GDP data. Despite the retreat, the outlook of the pair remains broadly firm as the US Dollar remains fragile following the Federal Reserve’s (Fed) monetary policy outcome.
- At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to regain ground after posting a fresh seven-week low near 98.15 on Thursday.
- On Wednesday, the Fed lowered its interest rates by 25 basis points (bps) to 3.50%-3.75% and signaled that there will be one more cut in 2026. Fed Chair Jerome Powell stated that inflationary pressures would peak in the first quarter of the next year if there were no new tariffs.
- The inflation and the monetary policy guidance from the Fed turned out as a major drag on the US Dollar as it was contrary to what market participants had projected. Investors anticipated the central bank to signal that there will be no further interest rate cuts unless officials see a dramatic shift in inflation risks.
- Meanwhile, US President Donald Trump has stated after the Fed’s policy meeting that there should be more interest rate cuts going forward. “I know there was a quarter-point reduction this past week, and the President was pleased to see that, but he thinks more should be done," White House spokeswoman Karoline Leavitt said on Thursday, Reuters reported.
- Going forward, the major trigger for the US Dollar will be the US Nonfarm Payrolls (NFP) data for November, which will be released on Tuesday. The impact of the US NFP data will be significant on market expectations for the Fed’s monetary policy outlook as the key reason behind the central bank reducing the Federal Fund rate by 100 bps this year has been weakening labor demand.
Technical Analysis: GBP/USD struggles to extend its advance above 1.3400
GBP/USD drops to near 1.3380 on Friday. The 20-day Exponential Moving Average (EMA) has turned higher and price holds above it, reinforcing a near-term upside bias.
The 14-day Relative Strength Index (RSI) at 64 is positive and not overbought, backing more upside. Measured from the 1.3791 high to the 1.3007 low, the pair cleared the 38.2% retracement at 1.3307 and is approaching the 50% retracement at 1.3399.
Further upside would emerge on a daily close above the 50% retracement at 1.3399, targeting the October high of 1.3527, whereas failure there could trigger a pullback. The 20-EMA at 1.3279 offers initial support, with its rising slope favoring dip-buying.
(The technical analysis of this story was written with the help of an AI tool)
The US Dollar (USD) weakened further after the Fed meeting, with Dollar Index (DXY) closing near 98.00 as rate expectations shifted lower and seasonal pressure added to the bearish tone, ING's FX analyst Frantisek Taborsky notes.
Lower Fed rate expectations and seasonality weigh on USD
"Following Wednesday’s Fed meeting, the US dollar extended its decline yesterday, with the DXY closing near 98.00, close to our expectations."
"The bearish wind is coming not only from interest rates but also from end-of-year seasonality, in our view. Dollar rates saw another calibration of Fed expectations lower, with the 2y falling to 3.50% and the market pricing in 3.05% as the Fed terminal rate at the end of next year, keeping pressure on the US dollar."
"Today's US calendar does not have much to offer, and the market should stabilise somewhat after the risk event. Some risk-off sentiment coming from equities should, on the other hand, provide some floor for the dollar. Overall, DXY around 98.350 with a small downside to 98.200 seems fair for now, in our view."
USD/CNH continues to drift lower amid a softer US Dollar (USD) and another strong CNY fix, with the PBoC guiding the RMB along a controlled appreciation path. USD/CNH last seen at 7.0536 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note, OCBC's FX analysts Frances Cheung and Christopher Wong note.
PBoC maintains steady appreciation pattern for RMB
"USD/CNH continued to trade lower, taking cues from a softer USD and lower USD/CNY fix. The fix was set at 7.0638, the lowest in 14 months."
"The fixing pattern remains consistentsince Apr-2025 and we view this as a deliberate move to steer the RMB on a gradual appreciation path while maintaining market order. Rapid appreciation is likely not what policymakers wish to see as that could lead to a rush for exporters to convert USD holdings (in turn resulting in disorderly appreciation or higher volatility)."
"Daily momentum is flat while RSI is near oversold conditions. Support here at 7.05, 7.0380 levels. Decisive break past these levels risk the pair overshooting towards 7. Resistance at 7.08 (21 DMA)."
The Nasdaq 100 is stabilizing after breaking its descending channel and retaking the 50-DMA, but momentum is capped near the 25,890 gap, Société Générale's FX analysts note.
Index builds base after reclaiming 50-DMA
"Nasdaq 100 recently broke above the upper band of a steep descending channel and reclaimed the 50-DMA. The advance has stalled near previous down gap at 25890pts. The index appears to be forming a small base."
"The 50-DMA, currently around 25200pts, is a short-term support and defending this is crucial for continuation in the uptrend. A breakout above 25890pts could pave the way for extension in up move towards October highs near 26180pts, followed by projections around 26600pts."
Recent policy meetings suggest China has moved away from tariff-related emergency response mode. Upgrading and rebalancing gaining importance in the policy agenda to foster self-sustained growth. Macro policies will likely remain supportive, but we see little appetite to ramp up stimulus, Standard Chartered's Shuang Ding and Hunter Chan report.
From 'extraordinary' to 'necessary'
"The Central Economic Work Conference (CEWC), which concluded on 11 December, elaborated on the policy agenda for 2026. The top policy makers pledged to enhance 'countercyclical and cross-cyclical adjustment'. This indicates that the authorities are looking beyond near-term volatilities following the recent US-China trade deals, and refocusing on tech-driven growth and expanding domestic demand. A year earlier, policy makers had vowed to strengthen 'extraordinary countercyclical adjustment', scaling up stimulus to offset the negative external shock from the looming trade wars."
"China will 'continue to implement more proactive fiscal policy and moderately loose monetary policy' according to the CEWC, suggesting no major change to the macro policy stance. Policy makers pledged to maintain a 'necessary' deficit size, compared to 'raising the deficit ratio' in late 2024. We expect the official deficit ratio to be reduced slightly to 3.8% of GDP in 2026 from 4.0% in 2025. They also asked the PBoC to keep liquidity ample and use tools such as reserve requirement ratio (RRR) and policy rate cuts 'flexibly and effectively', suggesting there is no intention of aggressive easing. We expect a 25bps RRR cut in Q1-2026 and a 10bps policy rate cut in Q2."
"Policy makers also vowed to prevent a further decline in investment; rectify disorderly competition; and stabilise the housing market. Boosting the services sector was highlighted in three of the eight major tasks for 2026. We expect more fiscal resources to be directed to infrastructure and further opening up the services sector."
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