EUR/USD
The EUR/USD pair declines to around 1.1730 during the early European session on Wednesday, pressured by renewed US Dollar (USD) demand. Nonetheless, the potential downside for the major pair might be limited amid the growing acceptance that the European Central Bank (ECB) is done cutting interest rates. The ECB is expected to hold interest rates steady at its December meeting on Thursday. The central bank has kept its key deposit rate on hold at 2% since July.
GBP/USD
GBP/USD is likely to stay subdued if UK CPI meets expectations. However, any upside surprise could cap losses by tempering dovish sentiment ahead of the Bank of England’s (BoE) policy decision on Thursday. The BoE is widely expected to cut rates by 25 basis points to 3.75%, the lowest since 2022, as rising unemployment and economic stagnation ease inflation pressures. Traders will also observe UK Retail Sales and PPI Core Output data.
USD/JPY
The USD/JPY pair attracts some sellers near 154.80 during the early Asian session on Wednesday. The Japanese Yen (JPY) strengthens against the US Dollar (USD) amid growing speculation that the Bank of Japan (BoJ) will hike rates to 0.75% on Friday.
AUD/USD
The Australian Dollar (AUD) declines against the US Dollar (USD) on Wednesday, extending its losses for the fifth consecutive day. However, the downside of the AUD/USD pair could be restrained as the Aussie Dollar could find support as markets grow increasingly wary of a Reserve Bank of Australia (RBA) rate hike as early as February.
NZD/USD
The NZD/USD pair struggles to capitalize on the previous day’s bounce from the 0.5760-0.5755 region, or an over one-week low, and ticks lower during the Asian session on Wednesday. Spot prices currently trade around the 0.5780-0.5775 area, down nearly 0.20% for the day, though the fundamental backdrop warrants caution for bearish traders.
USD/CAD
USD/CAD rebounds from a three-month low of 1.3730, recorded in the previous session, currently trading around 1.3770 during the Asian hours on Wednesday. The pair gains ground as the US Dollar (USD) finds support, as mixed labor market data did little to reinforce expectations of additional Federal Reserve rate cuts.
USD/CHF
The USD/CHF pair trades in positive territory around 0.7960 during the early European session on Wednesday, bolstered by a rebound in the US Dollar (USD). However, the prospect of the US Federal Reserve (Fed) interest rate cut next year could weigh on the Greenback against the Swiss Franc (CHF). The Swiss National Bank (SNB) Quarterly Bulletin for the fourth quarter is due later in the day. Also, New York Fed President John Williams and Atlanta Fed President Raphael Bostic are set to speak.
CRUDE OIL
Oil prices rose more than 1% on Wednesday after U.S. President Donald Trump ordered “a total and complete” blockade of all sanctioned oil tankers entering and leaving Venezuela, raising fresh geopolitical tensions at a time of concerns over demand.
Gold price (XAU/USD) extends its upside to near seven-week highs above $4,350 during the early European trading hours on Wednesday. The precious metal gains momentum as the US labor market remains relatively resilient but shows signs of slowing. The mixed US employment report for November reinforces bets of further rate cuts by the US Federal Reserve (Fed) and weighs on the US Dollar (USD). Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.
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