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Hello everyone, today XM Forex will bring you "[XM Forex Official Website]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On December 12, 2025, the core contradiction in the foreign exchange market focused on "revaluation of expectations after the Federal Reserve's interest rate cut" and "increased policy differentiation of global central banks." The U.S. dollar index fell for two consecutive days, and the differentiation of non-U.S. currencies was obvious. As of press time, the U.S. dollar index was at 103.25, down 0.42% on the day; the euro was 1.0890 (+0.38%), the pound was 1.2615 (+0.29%), the U.S. dollar was 141.80 yen (-0.51%), the Australian dollar was 0.6680 (+0.31%), and the offshore RMB was 7.0490 (-0.12%). The following is the core good and bad news that affects the foreign exchange market that day, with currency effects and operation tips.
The Federal Reserve announced a 25 basis point interest rate cut on December 10. The federal funds rate fell to 3.5%-3.75%, the third rate cut this year; it also announced that it would restart the purchase of short-term U.S. debt on December 12 and purchase US$40 billion of short-term government debt in the next 30 days. Although it emphasized that it was not QE, the market liquidity easing expectations were strengthened.
The number of initial jobless claims in the United States for the week of December 7 was 236,000, higher than expected at 220,000, indicating a cooling of the labor market and intensifying market bets on further interest rate cuts by the Federal Reserve in 2026. The 10-year U.S. Treasury yield fell to 3.85%, weakening the U.S. dollar's interest rate advantage.
Impact: The U.S. dollar index fell below the 50-day moving average, G10 currencies such as the euro and the pound benefited, gold and silver strengthened simultaneously, and spot gold hit a record highA new high in more than a month reached $4285.75 per ounce.
The Swiss National Bank kept its benchmark interest rate unchanged at 0% on December 11, marking the second consecutive time on hold, in line with market expectations, and avoiding further easing that would suppress the Swiss franc. At the same time, the Swiss inflation rate remained at a moderate range of 1.2%, and the Swiss franc's safe-haven attribute was highlighted. The US dollar fell 0.35% against the Swiss franc to 0.8720 during the day.
The Central Economic Work Conference clarified “moderately loose monetary policy + flexible use of RRR and interest rate cuts” to stabilize market expectations for China’s economy and liquidity, and boost demand for www.vifu.netmodity currencies and RMB.
The China Foreign Exchange Trading Center and other institutions have optimized account services for overseas institutional investors and integrated the entire process of account opening, change and cancellation, making it easier for foreign investors to enter the market and enhancing the attractiveness of RMB assets.
The European Union launched written procedures on December 11 to promote the long-term freezing of the assets of the Russian Central Bank, and geopolitical tensions intensified; Ukraine expanded its attacks on Russia’s energy infrastructure, including attacks on the Filanovsky oil field in the Caspian Sea and oil tankers in the Black Sea. Safe-haven currencies such as the Japanese yen and Swiss franc received short-term support.
After cutting interest rates, Powell emphasized that "the threshold for subsequent interest rate cuts has been raised." Clear signals of continued decline in inflation and weakening economic data are required. The market's expectation for the number of interest rate cuts in 2026 has been reduced from four to three, limiting the decline of the U.S. dollar index. The rebound of the euro and the pound was blocked by key resistance levels.
The euro zone’s industrial output fell by 0.3% month-on-month in November, declining for the third consecutive month. Germany’s ZEW economic sentiment index in December was -12.8, lower than expected, indicating that the European economic recovery is weak, and the euro against the dollar is difficult to break through the 1.0900 mark.
The British CPI in November was 2.4% year-on-year. Although it was lower than the previous value, retail sales fell by 0.5% month-on-month and consumer demand was weak. The Bank of England may keep interest rates unchanged at 5.25% at its meeting next week, but expectations for an interest rate cut have increased, suppressing gains in the pound.
Both the IEA and OPEC monthly reports confirmed that global crude oil supply will be oversupplied in 2026. WTI crude oil fell 1.83% to US$57.39/barrel during the day, and Brent crude oil fell 2.48% to US$61.07/barrel. The gains of www.vifu.netmodity currencies such as the Australian dollar and Canadian dollar were limited, and the Australian dollar failed to break through the 0.6700 integer mark against the US dollar.
Japan’s core CPI in November was 2.5% year-on-year, although it was higher than the central bank’sThe 2% target has been implemented, but the economic growth has slowed to 0.2%, and the market has cooled down on the Bank of Japan’s interest rate hike expectations on December 19. The USD/JPY fluctuates in the 141-142 range, and the yen lacks continued upward momentum.
USD: The short-term weakness continues. Pay attention to the 103.00 support level. If it falls below or tests 102.50; if it rebounds to the resistance of 103.80, you can go short on the rebound to the 103.60-103.80 range, with a stop loss of 104.10.
EUR/USD: support 1.0850, resistance 1.0920, breakout can be seen at 1.0950, pull back to 1.0860-1.0880 to try long, stop loss 1.0830.
USD/JPY: Range 141.20-142.20, mainly sell high and buy low, avoid chasing the rise and killing the fall.
Risk warning: The US PPI and consumer confidence index may trigger abnormal movements in the US dollar in the evening. Positions need to be controlled and stop losses strictly set.
The above content is all about "[XM Foreign Exchange Official Website]: Collection of good and bad news affecting the foreign exchange market". It is carefully www.vifu.netpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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