Forex News
Market participants who held onto the Japanese Yen (JPY) were probably glad to see the end of the year, once again. The Yen managed to gain ground against the weak US dollar in 2025 by a small margin. After a very weak second half of the year (approximately -7.5% vs the G10 average), it was uncertain whether the Yen would be the second-worst performing G10 currency, Commerzbank's FX analyst Michael Pfister notes.
JPY faces pressure from fiscal concerns and China tensions
"In December, the familiar pattern resumed, with the Japanese finance minister emphasizing that Japan has a 'free hand' to take bold action against currency movements that do not align with the fundamentals. As soon as the Yen depreciates more strongly, such discussions arise. However, it usually takes a few weeks of increasingly heated rhetoric before actual intervention takes place, and it does not look as if the Yen will continue to depreciate."
"The question arises of what constitutes a JPY movement that is not in line with the fundamentals. At the end of the year, the Yen was affected by two factors: a larger-than-expected fiscal package raised concerns about the sustainability of public finances, as did an escalating conflict with China. Officials there are upset about statements made by the Japanese prime minister regarding Taiwan. These statements were not new, merely reiterating earlier ones. Nevertheless, China currently seems to be on the path to escalation. This week, it was announced that China had imposed export controls on dual-use goods to Japan. At a time when the Japanese real economy is struggling, this is another setback."
"It is currently difficult to predict when the conflict with China will cool down again, and when the Yen will recover. It is also hard to envisage developments in Japan shaking off the conflict. This morning's disappointing wage data makes further interest rate hikes even less likely. For those hoping for a significant appreciation of the JPY, the only option for now is to wait for the conflict with China to cool down again. They must also hope that the conflict does not escalate further. After all, the Chinese government could further escalate the conflict with a complete export ban on rare earths, which would deal a significant blow to the Yen."
- EUR/CHF loses upside momentum after Swiss inflation data.
- Swiss CPI stabilises in December, easing fears of a return to negative interest rates.
- Traders assess mixed Eurozone data and steady signals from the ECB.
The Euro (EUR) trades little changed against the Swiss Franc (CHF) on Thursday, with markets digesting fresh economic data from Switzerland and the Eurozone. At the time of writing, EUR/CHF is trading around 0.9313, snapping a two-day winning streak.
Data released by the Swiss Federal Statistical Office showed that the Consumer Price Index (CPI) stabilised in December, unchanged on the month after a 0.2% decline in November and beating market expectations for a 0.1% drop. On an annual basis, CPI rose 0.1% in December, in line with forecasts, after stagnating at 0.0% in November.
The figures reinforced expectations that the Swiss National Bank (SNB) will keep interest rates unchanged in the months ahead, allowing it to maintain a cautious stance while easing market fears over a possible return to negative interest rates.
At its December 11 policy meeting, the Swiss National Bank left its key interest rate unchanged at 0%. Minutes from the meeting, released earlier in the day, showed that policymakers saw little urgency to adjust policy at this stage. “The Governing Board found that there was currently no need for monetary policy action,” the SNB said. “Neither a tightening of monetary policy nor a further easing of monetary policy would be appropriate at this juncture.”
In the Eurozone, the European Commission’s Business Climate Index improved to -0.56 in December from -0.66 previously, pointing to a modest stabilisation in corporate conditions. Consumer Confidence strengthened to -13.1 from -14.6, while the Economic Sentiment Indicator edged lower to 96.7 from 97.1.
On the inflation front, Eurozone Producer Price Index (PPI) rose 0.5% on the month in November, accelerating from 0.1% previously and beating market expectations of 0.2%. On an annual basis, producer prices fell 1.7%, marking the fourth consecutive month of YoY decline. Meanwhile, the Eurozone Unemployment Rate eased to 6.3% in November from 6.4%.
ECB Vice President Luis de Guindos said on Thursday that the current level of interest rates is “appropriate,” adding that inflation is now at target, though uncertainty remains very high.
Looking ahead, Switzerland is set to release its latest Unemployment Rate on Friday. In the Eurozone, markets will monitor Retail Sales figures, alongside Germany’s Industrial Production and Trade Balance data.
SNB FAQs
The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.
The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.
The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.
- EUR/USD extends losses and nears one-month lows, at 1.1660.
- Eurozone Unemployment dropped, and producer prices rose in November.
- Markets are on a wait-and-see stance ahead of Friday's US NFP report.
EUR/USD posts moderate lows on Thursday, trading at 1.1673 at the time of writing, approaching four-month lows, at the 1.1660 area. A mild risk aversion is buoying the US Dollar, while the unexpected decline in the Eurozone's unemployment and a string of somewhat brighter economic sentiment indicators have failed to support the Euro.
On Wednesday, a set of mixed US data failed to provide any particular hint on the US Federal Reserve's (Fed) monetary policy path. Employment-related data confirmed that the labour market remains stalled, but an upbeat services sector report pointed to a significant economic recovery in the last quarter of 2025.
Later on Thursday's the US weekly Jobless Claims and Nonfarm Productivity figures might provide some fundamental guidance for the US Dollar, although investors are likely to remain looking from the sidelines, awaiting the release of December's Nonfarm Payrolls report on Friday.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.17% | -0.05% | 0.08% | 0.36% | 0.40% | 0.01% | |
| EUR | -0.06% | 0.11% | -0.09% | 0.03% | 0.30% | 0.36% | -0.05% | |
| GBP | -0.17% | -0.11% | -0.19% | -0.09% | 0.19% | 0.25% | -0.16% | |
| JPY | 0.05% | 0.09% | 0.19% | 0.11% | 0.40% | 0.43% | 0.04% | |
| CAD | -0.08% | -0.03% | 0.09% | -0.11% | 0.29% | 0.33% | -0.07% | |
| AUD | -0.36% | -0.30% | -0.19% | -0.40% | -0.29% | 0.06% | -0.35% | |
| NZD | -0.40% | -0.36% | -0.25% | -0.43% | -0.33% | -0.06% | -0.41% | |
| CHF | -0.01% | 0.05% | 0.16% | -0.04% | 0.07% | 0.35% | 0.41% |
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).
Daily Digest Market Movers: Euro, unimpressed by bright Eurozone data
- Eurozone data beat expectations on Thursday, especially the Unemployment rate, which dropped to 6.3% in November, from 6.4% in October, against market expectations of a steady reading.
- Apart from that, the Producer Prices Index (PPI) accelerated to 0.5% from 0.1% in October, beyond market expectations of a 0.2% increase. Year-on-year, producer prices contracted at a 1.7% pace from -0.5% in October, but still at a slower pace than the -1.9% forecasted by market analysts.
- The economic sentiment indicators released by the European Commission have also beaten expectations in most cases. The Consumer Confidence has risen to -13.1 in December from -14.6 in November, Business Climate improved to -0.56 from -0.66, and Industrial Sentiment ticked up to -9 from -9.3 in the previous month.
- Earlier in the day, data from Germany showed that the country's Factory Orders rose 5.6% in November, after the 1.6% growth seen in October, beating expectations of a 1% drop. Year on Year, orders bounced up 10.5% in November following a 0.7% drop in October.
- US data released on Wednesday failed to provide any further insight into the Fed's near-term monetary policy. The ADP Employment report showed a lower-than-expected increase in net jobs in December, 41K against the market consensus of 47K, while November's decline was revised down to -29K from the -32K previously estimated.
- Job openings failed to improve the outlook of the labour market. November's JOLTS report revealed that vacancies dropped to 7.1 million in November, below the 7.6 million anticipated by market analysts, and also below the upwardly revised 7.449 million openings seen in October.
- Later on Thursday, the US weekly Jobless Claims are expected to have increased to 210,000 in the last week of December from 199,000 in the previous week. The impact of these figures, however, is likely to be limited with the all-important Nonfarm Payrolls report around the corner.
Technical Analysis: EUR/USD is on a bearish correction from 1.1808
The EUR/USD bearish trend from December highs of 1.1808 remains in play, with support at the 1.1660 area holding bears for now. Technical indicators in the 4-hour chart are mildly negative. The 4-hour Moving Average Convergence Divergence (MACD) histogram bars are moving around the zero level, suggesting a lack of momentum, while the Relative Strength Index (RSI) flatlined below the 40 level.
The January 5 low of 1.1659 is closing the path towards the December 8 and 9 lows, in the area of 1.1615. Upside attempts, on the contrary, remain capped below Wednesday's high, near 1.1700. Further up, the descending trendline from December highs, now at 1.1725, and Tuesday's high, at 1.1740, are the next targets.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- USD/CAD extends gains, nearing 1.3900 on cautious markets, low Oil prices.
- WTI Oil remains nearly 1% down on the week, despite Thursday's uptick.
- US Dollar volatility remains subdued ahead of Friday's Nonfarm Payrolls report.
The US Dollar is trading firm against its Canadian counterpart on Thursday, rallying for the fifth consecutive day, to reach a four-week high at 1.3888. A mild risk-off mood supports the safe-haven Greenback, while low Oil prices have weighed on the commodity-sensitive Canadian Dollar this week.
Prices of the benchmark WTI Oil, Canada’s main export, have picked up from Wednesday’s lows but remain nearly 1% down on the week. US President Donald Trump announced that Venezuela will deliver 30 to 50 million barrels to the US, which heightened concerns about an excess of supply in a context of softer global economic growth.
On the macroeconomic front, recent data from the US has been mixed. Employment data released on Wednesday highlighted a stalled labour market while the services sector’s activity accelerated beyond expectations, hinting at a strong economic performance in the last quarter of 2025.
Investors, however, remain wary of placing large US Dollar directional bets ahead of Friday’s Nonfarm Payrolls report, which will be analyzed carefully to assess the timing and the depth of the US Federal Reserve’s monetary easing cycle.
In Canada, the calendar was thin this week. The International Merchandise Trade figures might provide some guidance for the Loonie on Thursday, although the highlight of the week will be December’s employment report, due on Friday. Net jobs are expected to have dropped, and the Unemployment rate is seen ticking up. The risk is skewed to the downside for the CAD.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- WTI US Oil prices recover following the release of much stronger-than-expected inventory data.
- Weekly figures show a steep drop in US Crude Oil stockpiles, signaling firmer demand.
- Developments around Venezuelan Oil exports and US macroeconomic data remain in focus.
West Texas Intermediate (WTI) US Oil trades around $56.70 on Thursday at the time of writing, up 0.90% on the day. WTI prices rebound, supported by the release of inventory data showing a sharp decline in US Crude Oil stockpiles.
According to weekly data published by the US Energy Information Administration (EIA), Crude Oil inventories fell by 3.831 million barrels in the week ended January 2. This drop is significantly larger than the previous week’s decline and stands in sharp contrast with market expectations, which had pointed to a build in stocks. A larger-than-expected drawdown in inventories is generally seen as a sign of stronger demand, providing immediate support to Oil prices.
However, the upside potential for WTI remains partly capped by geopolitical and policy developments. US President Donald Trump said that Venezuela would export around $2 billion worth of Oil to the United States (US). The US administration also indicated that it intends to retain long-term control over Venezuelan Oil sales and related revenues, with the stated goal of stabilizing the country’s economy and rebuilding its energy sector. These announcements fuel concerns about additional supply entering the North American market, which could limit further price gains.
Investors are also closely monitoring US macroeconomic indicators. The US employment report for December, due later on Friday, is a key event for markets. Job growth is expected to be moderate, alongside a slight decline in the unemployment rate. Any signs of a slowdown in the US labor market could weigh on the US Dollar (USD) and, through standard market dynamics, support dollar-denominated commodities such as Oil.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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