Forex News
- GBP/JPY holds near multi-year highs as thin holiday trade keeps price action range-bound.
- Persistent Yen weakness continues to support the cross.
- Technically, the RSI is cooling from overbought levels, pointing to near-term consolidation.
The British Pound (GBP) trades slightly lower against the Japanese Yen (JPY) on Wednesday, though thin holiday trading conditions are keeping price action contained within a tight range. At the time of writing, GBP/JPY trades around 210.60, holding firm near year-to-date highs and its highest level since August 2008.
The Japanese Yen has remained broadly weak this year, as fiscal concerns under the new leadership of Sanae Takaichi and a gradual pace of monetary policy normalisation continued to weigh on the currency. Against this backdrop, GBP/JPY is up around 6.9% year to date, reflecting persistent policy divergence between the UK and Japan.
From a technical perspective, the daily chart continues to reflect a strong uptrend, marked by a clear sequence of higher highs and higher lows, with prices holding comfortably above key moving averages.
That said, the Relative Strength Index (RSI) is easing from overbought territory and hovers around 68, signalling a risk of a mild pullback or consolidation before the next leg higher. A sustained recovery could see the pair push beyond the 212.00 handle, extending the broader bullish trend.
On the downside, initial support is seen in the 208.50-208.00 zone, where the 21-day Simple Moving Average (SMA) sits near 208.13. A decisive break below this short-term average would weaken the bullish structure and open the door for a deeper pullback toward the 50-day SMA around 205.22, followed by the 100-day SMA near 202.57.
Meanwhile, the Average Directional Index (ADX) is holding near 27, signalling that the trend remains strong, even as momentum cools in the near term.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- EUR/GBP retreats around 0.8725 early Wednesday in the European session, down 0.10% on the day
- The Bank of England’s cautious tone after its rate cut strengthens the British currency
- Limited expectations of European Central Bank rate cuts in 2026 could help limit the downside
EUR/GBP trades in negative territory around 0.8725 on Wednesday at the time of writing, extending a sequence of declines that began earlier in the week. The pair remains under pressure as the Pound Sterling (GBP) benefits from the Bank of England’s (BoE) relatively hawkish communication. At the same time, the Euro (EUR) limits the downside from the perception that the European Central Bank’s (ECB) easing cycle is approaching its end.
The Pound Sterling appreciates after the BoE delivered a widely expected 25-basis-point cut to its benchmark interest rate, bringing it to 3.75% at its latest meeting. This marks the first reduction since last summer, but the overall message from policymakers is seen as cautious. BoE Governor Andrew Bailey noted that rates are on a gradual downward path, while warning that each additional cut would become a more delicate decision due to still-persistent inflation. This guidance reinforces the view that the BoE is not embarking on an aggressive easing cycle.
Market expectations broadly align with this assessment. According to Reuters, investors believe the Bank of England will deliver at least one further rate cut in the first half of next year, with nearly a 50% chance of a second move before year-end. This outlook for a slow and measured easing path supports the Pound Sterling and acts as a headwind for EUR/GBP in the near term.
On the Eurozone side, the European Central Bank maintains a more wait-and-see stance. The ECB kept its three key interest rates unchanged at its latest meeting, marking the fourth consecutive time it has held them steady. ECB President Christine Lagarde said the institution is in a “good position” and stressed that all options remain on the table. Money markets currently assign less than a 10% chance of an ECB rate cut as early as February 2026, suggesting that the easing cycle may be close to completion.
This relative divergence between a cautious but already easing Bank of England and an ECB that remains on hold helps to contain price action in the cross. With trading volumes thinning ahead of the year-end holiday period, EUR/GBP is likely to trade more calmly, with downside pressure limited as long as monetary policy expectations remain broadly unchanged.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.10% | -0.25% | -0.16% | -0.16% | -0.07% | -0.18% | |
| EUR | 0.02% | -0.08% | -0.22% | -0.14% | -0.14% | -0.04% | -0.16% | |
| GBP | 0.10% | 0.08% | -0.15% | -0.06% | -0.07% | 0.04% | -0.08% | |
| JPY | 0.25% | 0.22% | 0.15% | 0.12% | 0.10% | 0.19% | 0.08% | |
| CAD | 0.16% | 0.14% | 0.06% | -0.12% | -0.02% | 0.06% | -0.03% | |
| AUD | 0.16% | 0.14% | 0.07% | -0.10% | 0.02% | 0.10% | -0.08% | |
| NZD | 0.07% | 0.04% | -0.04% | -0.19% | -0.06% | -0.10% | -0.12% | |
| CHF | 0.18% | 0.16% | 0.08% | -0.08% | 0.03% | 0.08% | 0.12% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- The Pound Sterling extends its upside to near 1.3535 against the US Dollar, the highest level seen in three months.
- Preliminary US GDP annualized expanded at a strong pace of 4.3% in the third quarter this year.
- Investors expect the BoE to deliver at least one interest rate cut by the first half of 2026.
The Pound Sterling (GBP) revisits the three-month high around 1.3535 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair trades firmly as the Greenback underperforms, with unexpectedly stronger flash United States (US) Q3 Gross Domestic Product (GDP) data failing to diminish Federal Reserve (Fed) dovish expectations.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh 11-week low near 97.75.
The US Bureau of Economic Analysis (BEA) reported on Tuesday that the economy grew by 4.3% compared to the same quarter of the previous year, faster than 3.8% in the second quarter this year.
Meanwhile, the CME FedWatch tool shows that traders see a 70.6% that the Fed will reduce interest rates by at least 50 bps in 2026. The expected scope of interest rate cuts is higher than the single cut projected for next year by officials in the monetary policy announcement last week.
Federal Reserve (Fed) dovish expectations for 2026 remain upbeat as the US GDP report released on Tuesday lacks evidence of strong job creation despite robust growth. The report showed that businesses invested heavily in equipment and Artificial Intelligence (AI).
Economists have stated that the strong GDP growth appears to be more of a K-shaped recovery, with household spending remaining heavy in recreational activities. The demand by low and middle-income households remains weak due to high inflation and a sluggish job market.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.15% | -0.30% | -0.13% | -0.20% | -0.13% | -0.22% | |
| EUR | 0.09% | -0.06% | -0.22% | -0.04% | -0.11% | -0.04% | -0.14% | |
| GBP | 0.15% | 0.06% | -0.15% | 0.02% | -0.04% | 0.02% | -0.07% | |
| JPY | 0.30% | 0.22% | 0.15% | 0.20% | 0.11% | 0.17% | 0.09% | |
| CAD | 0.13% | 0.04% | -0.02% | -0.20% | -0.09% | -0.03% | -0.10% | |
| AUD | 0.20% | 0.11% | 0.04% | -0.11% | 0.09% | 0.06% | -0.07% | |
| NZD | 0.13% | 0.04% | -0.02% | -0.17% | 0.03% | -0.06% | -0.09% | |
| CHF | 0.22% | 0.14% | 0.07% | -0.09% | 0.10% | 0.07% | 0.09% |
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).
Pound Sterling trades higher ahead of US Initial Jobless Claims data
- The Pound Sterling trades broadly higher against its major currency peers ahead of Christmas Eve on Wednesday. The British currency has remained firm since the monetary policy announcement by the Bank of England (BoE) last Thursday, as it maintained the gradual monetary easing stance.
- At the meeting, the BoE reduced interest rates by 25 bps to 3.75% with a tight 5:4 vote, and guided that monetary policy will remain on a gradual downward path. The BoE refrained from supporting aggressive easing as inflation is still well higher than the 2% target despite cooling down in the last two months.
- The United Kingdom (UK) headline inflation has decelerated to 3.2% YoY in November after peaking at 3.8% in the July-September period.
- The BoE kept the door open for further interest rate cuts as UK labor market conditions have remained weak.
- Meanwhile, investors seek fresh cues about how much the BoE will cut interest rates in 2026. According to a report from Reuters, traders expect the central bank to deliver at least one 25-bps interest rate cut in the first half of next year.
- In Wednesday’s session, the GBP/USD pair will be influenced by the US Initial Jobless Claims data, which will be published at 13:30 GMT.
Technical Analysis: GBP/USD aims to stabilize above 61.8% Fibonacci retracement level at 1.3496
On the daily chart, GBP/USD trades at 1.3513. The pair holds above the rising 20-day EMA at 1.3364, keeping the short-term bias pointing higher.
The 14-day Relative Strength Index (RSI) at 70.12 is overbought and warns of stretched momentum. Measured from the 1.3794 high to the 1.3014 low, the 61.8% Fibonacci retracement level at 1.3496 has been reclaimed, while the 78.6% retracement at 1.3627 is the next resistance.
Trend support remains defined by the ascending 20-day EMA, with dips expected to test that area. The previously mentioned RSI would need to cool to ease upside pressure and allow consolidation. A close below the 50% Fibonacci retracement level at 1.3404 would dent the bullish tone and expose the 38.2% retracement at 1.3312. If the latter is breached, it would open the room to a further extension of the recovery.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Last release: Thu Dec 18, 2025 12:00
Frequency: Irregular
Actual: 3.75%
Consensus: 3.75%
Previous: 4%
Source: Bank of England
- USD/CHF falls further to near 0.7830 amid weakness in the US Dollar.
- The Greenback underperforms despite strong US Q3 GDP data.
- The Swiss Franc trades higher in a holiday-shortened week.
The USD/CHF pair extends its losing streak for the third trading day on Wednesday. The Swiss Franc pair posts a fresh three-month low at 0.7860 during the European trading session as the US Dollar (USD) continues to underperform its peers despite surprisingly upbeat United States (US) Q3 Gross Domestic Product (GDP) data.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.63% | -0.93% | -1.12% | -0.88% | -1.51% | -1.75% | -0.99% | |
| EUR | 0.63% | -0.30% | -0.51% | -0.26% | -0.89% | -1.12% | -0.36% | |
| GBP | 0.93% | 0.30% | -0.13% | 0.04% | -0.60% | -0.83% | -0.06% | |
| JPY | 1.12% | 0.51% | 0.13% | 0.28% | -0.34% | -0.58% | 0.05% | |
| CAD | 0.88% | 0.26% | -0.04% | -0.28% | -0.55% | -0.87% | -0.10% | |
| AUD | 1.51% | 0.89% | 0.60% | 0.34% | 0.55% | 0.06% | 0.54% | |
| NZD | 1.75% | 1.12% | 0.83% | 0.58% | 0.87% | -0.06% | 0.78% | |
| CHF | 0.99% | 0.36% | 0.06% | -0.05% | 0.10% | -0.54% | -0.78% |
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).
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades close to the three-month low of 97.75 posted during the day.
The data showed on Tuesday that the US economy grew strongly at an annualized pace of 4.3%. Economists expected the GDP growth to come in lower at 3.3% from 3.8% seen in the second quarter this year.
The US Dollar has remained under pressure due to firm expectations that the Federal Reserve (Fed) will deliver more than one interest rate cut, as projected by officials in the monetary policy announced last week.
Meanwhile, the Swiss Franc (CHF) trades higher against its major peers ahead of Christmas Eve.
USD/CHF technical analysis
USD/CHF trades lower to near 0.7860. It extends its slide below a declining 20-day Exponential Moving Average (EMA) at 0.7966, with the average turning lower and capping rebounds. The bearish alignment continues to put pressure on the pair.
The 14-day Relative Strength Index (RSI) at 31 (near oversold) confirms weak momentum.
Bearish momentum would persist while price remains beneath the 20-day EMA, and a daily close below the September 17 low of 0.7830 would elevate downside pressure.
(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.
- USD/JPY surrenders its entire gains made on the BoJ policy announcement day, and retraces to near 155.80.
- Investors are in vogue over the outlook of the BoJ’s monetary tightening campaign.
- The Fed is expected to cut interest rates by at least 50 bps next year.
The USD/JPY pair trades 0.23% lower to near 155.80 during the European trading session on Wednesday. The pair extends its losing streak for the third trading day on Wednesday, which started after failing to gain further above an almost 11-month high near 158.00.
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.66% | -0.95% | -1.11% | -0.88% | -1.51% | -1.75% | -0.95% | |
| EUR | 0.66% | -0.29% | -0.51% | -0.23% | -0.87% | -1.11% | -0.31% | |
| GBP | 0.95% | 0.29% | -0.11% | 0.06% | -0.58% | -0.81% | -0.01% | |
| JPY | 1.11% | 0.51% | 0.11% | 0.28% | -0.35% | -0.59% | 0.07% | |
| CAD | 0.88% | 0.23% | -0.06% | -0.28% | -0.56% | -0.87% | -0.07% | |
| AUD | 1.51% | 0.87% | 0.58% | 0.35% | 0.56% | 0.05% | 0.57% | |
| NZD | 1.75% | 1.11% | 0.81% | 0.59% | 0.87% | -0.05% | 0.82% | |
| CHF | 0.95% | 0.31% | 0.00% | -0.07% | 0.07% | -0.57% | -0.82% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The pair has given up its entire gains made following the monetary policy announcement by the Bank of Japan (BoJ) on Thursday, in which it raised interest rates by 25 basis points (bps) to 0.75%. The Japanese Yen (JPY) fell sharply as the BoJ didn’t provide guidance on the scope and timeframe for further interest rate hikes.
Meanwhile, the Yen has been gaining higher this week due to threats of intervention by Japan’s Finance Minister (FM) Satsuki Katayama against excessive one-sided moves.
Going forward, the Japanese Yen will be influenced by the Tokyo Consumer Price Index (CPI) data for December, which will be released on Friday. Tokyo CPI ex. Fresh Food is expected to have grown at an annualized pace of 2.5%, slower than 2.8% in November.
In addition to Yen’s recovery, persistent weakness in the US Dollar (USD) due to firm Federal Reserve (Fed) dovish expectations for 2026 has also strengthened the pair. The CME FedWatch tool shows the odds of the Fed reducing interest rates at least 50 bps in 2026 are 70.6%.
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.
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