🗓 UPCOMING ECONOMIC INDICATORS TO LOOK OUT FOR – DECEMBER 18

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🇬🇧 GBP

• BoE Interest Rate Decision: Forecast: 3.75% | Previous: 4.00%

This decision is pivotal for sterling as markets assess whether the Bank of England is ready to accelerate policy easing amid cooling inflation and slowing growth. A rate cut would confirm a dovish shift and weigh on GBP, while a hold would signal caution and offer near-term support.

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🇪🇺 EUR

• ECB Interest Rate Decision: Forecast 2.15% | Previous 2.15%
• Deposit Facility Rate: Forecast 2.00% | Previous 2.00%
• ECB Press Conference: 15:45 CAT

The ECB is expected to keep rates unchanged, placing full attention on forward guidance and President Lagarde’s tone. Any indication of faster disinflation or increased concern over growth could reinforce expectations for further easing and pressure the euro, while a firmer stance would help stabilize EUR sentiment.

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🇺🇸 USD

• Philadelphia Fed Manufacturing Index (Dec): Forecast 6.0 | Previous -1.7
• Inflation Rate YoY (Nov): Forecast 3.0% | Previous: —
• Core Inflation Rate YoY (Nov): Forecast 3.0% | Previous: —
• Inflation Rate MoM (Nov): Forecast 0.3% | Previous: —
• Core Inflation Rate MoM (Nov): Forecast 0.2% | Previous: —
• Initial Jobless Claims (Dec 13): Forecast 229K | Previous 236K

This data cluster will heavily influence near-term Fed expectations. Strong inflation or resilient labor data could challenge rate-cut optimism and support the dollar, while softer readings would reinforce expectations for monetary easing and pressure USD across major pairs.

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💡 Trader Tip:

This is a high-impact, central-bank-driven session with overlapping US inflation data. Expect volatility in EUR/USD, GBP/USD, EUR/GBP, USD/JPY, and XAU/USD. Avoid overexposure ahead of rate decisions, let the first reaction settle, and trade only on confirmed post-event direction.

💴 JPY – Yen Volatile Ahead of BoJ Rate Decision Despite Strong Domestic Data

💥 The yen traded with heightened volatility as markets positioned ahead of Friday’s BoJ policy decision, despite a run of stronger-than-expected domestic data.

📊 Japan posted a surprise trade surplus, solid export growth, and a sharp rebound in machinery orders, reinforcing expectations that the BoJ could raise rates by 25 bps to 0.75% as policy normalization continues.

↘️📊 However, near-term price action remained unstable as traders reduced exposure ahead of Governor Ueda’s guidance and weighed fiscal risks tied to Prime Minister Takaichi’s expansionary spending plans.

💴📈 While fundamentals point to a firmer yen over the medium term, positioning dynamics, fiscal uncertainty, and broader USD flows limited sustained JPY strength into the decision.

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💱 Impacted pairs:

🇺🇸🇯🇵 USD/JPY: Rebounded toward 155.40–155.50 after failing to hold below 155.00.

🇪🇺🇯🇵 EUR/JPY: Broke above 182.00, snapping a short losing streak.

🇬🇧🇯🇵 GBP/JPY: Recovered toward 207.90–208.00 amid broad yen softness.

🇦🇺🇯🇵 AUD/JPY: Extended gains above 103.00 on carry demand.

🇳🇿🇯🇵 NZD/JPY: Pressed toward the 90.00 handle on risk appetite and JPY underperformance.

🔔 DAILY MARKET DIGEST:

Gold Nears Record Highs as Fed Easing Bets, Geopolitics, and Central Bank Decisions Drive Volatility 🥇🇺🇸🌎🏦

🕊🌎🏦 Markets were driven by a powerful mix of dovish Fed expectations, geopolitical flare-ups, and critical central bank signals.

🥇 Gold dominated attention, pushing toward record highs above $4,340 as cooling US labour data, Fed commentary pointing to rates above neutral, and heightened tensions around Venezuela and Ukraine reinforced safe-haven demand.

🛢 Oil rebounded sharply from multi-year lows after President Trump ordered a blockade of sanctioned Venezuelan tankers, injecting a short-term supply risk premium despite a bearish longer-term surplus outlook.

💴💷 In FX, the yen remained volatile ahead of the BoJ decision despite strong domestic data, while sterling slid after UK inflation undershot expectations, cementing BoE rate-cut bets.

💵The US dollar stabilised on relative strength against GBP and JPY as conflicting Fed signals reinforced a pause narrative.

🔜 With major policy decisions and inflation data ahead, markets remain finely balanced and primed for decisive moves

📉📈 DAILY MARKET PULSE:

💵💴 USD/JPY: 155.64 — The pair consolidates below 156.80 as momentum softens ahead of the Bank of Japan rate decision despite strong domestic data.

💷💵 GBP/USD: 1.3375 — Sterling slips as softer inflation reinforces Bank of England cut expectations, keeping price capped below 1.3430 resistance.

🥇 XAU/USD: 4,337 — Gold trades near record highs as Fed easing bets and persistent geopolitical tensions continue to support safe-haven demand.

🛢 USOIL: 56.89 — Crude rebounds sharply as geopolitical supply risks return, but broader structure remains fragile below the 56.90 resistance zone.

🇬🇧1️⃣0️⃣0️⃣ UK100: 9,755 — The FTSE 100 extends gains as cooling UK inflation boosts rate-cut expectations and supports equity demand.

🇺🇸1️⃣0️⃣0️⃣ NAS100: 24,720 — The Nasdaq remains under pressure, sliding for a fourth session as tech weakness drives price toward 24,010 support.

🔵∴ ADA/USD: 0.3675 — Cardano breaks below key support as heavy long liquidations accelerate downside momentum across the crypto complex.

🟣⬡ LINK/USD: 12.263 — Chainlink weakens for a third session despite whale accumulation, with price hovering above the 12.13 support zone.

🟦💻 DELL: 127.89 — Dell shares slide as pricing concerns and AI-spending rotation pressure sentiment, exposing downside toward 117.40 support.

🌈𝐆 GOOGL: 296.72 — Alphabet extends losses as AI infrastructure concerns and regulatory risks weigh on big-tech valuations.

💷 GBP – Sterling Slides as Inflation Cements BoE Cut Expectations

📉📊 Sterling weakened after UK inflation cooled more sharply than expected, reinforcing the case for a 25bp BoE rate cut to 3.75% and accelerating expectations for further easing into 2026.

📊📉 Both headline and core CPI undershot forecasts on a monthly and annual basis, shifting market focus away from lingering inflation risks toward slowing growth and cooling labour conditions.

🛡 Rate differentials moved against GBP as traders repriced the BoE path more aggressively, leaving sterling vulnerable in the near term, particularly with U.S. CPI ahead and the dollar remaining supported.

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💱 Impacted pairs:

🇬🇧🇺🇸 GBP/USD: Sold off sharply toward 1.3310 before stabilising near 1.3370.

🇬🇧🇦🇺 GBP/AUD: Spiked lower into 2.0120–2.0130, then rebounded above 2.0200 and consolidated near 2.0250.

🇬🇧🇨🇦 GBP/CAD: Dropped toward 1.8350–1.8360 before recovering toward 1.8460–1.8470, later settling near 1.8435.

🇬🇧🇨🇭 GBP/CHF: Fell quickly to ~1.0615, rebounded toward 1.0645, then stabilised around 1.0640.

💵 USD – Dollar Firms on Cross-Currency Weakness as Fed Signals Patience

📈 The dollar stabilized and edged higher as weakness in GBP and JPY provided relative support, allowing USDX to rebound toward the 98.30–98.40 area after briefly touching multi-week lows.

🗣️🔀 Fed messaging remained mixed but reinforced a near-term pause: Governor Waller highlighted a softening labour market and policy rates still well above neutral, while Atlanta Fed President Bostic maintained a more hawkish stance, warning inflation risks remain dominant.

🔮✂️ With markets pricing only about a 24% chance of a January cut, attention has shifted to upcoming U.S. CPI and jobless claims.

💧🗳❓ Liquidity operations and political uncertainty around the next Fed chair added volatility, but overall price action reflected technical stabilization rather than a meaningful shift in the broader USD trend.

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💱 Impacted pairs:

💵 USDX: Rebounded from intraday lows, consolidating around 98.30–98.40.

🇪🇺🇺🇸 EUR/USD: Pulled back from highs, stalling near 1.1740 on mild USD recovery.

🇺🇸🇨🇦 USD/CAD: Held firm near 1.3780 despite higher oil prices, signaling CAD underperformance.

🇺🇸🇨🇭USD/CHF: Lifted from ~0.7935 toward 0.7985 before easing back below 0.7950 as risk sentiment steadied.

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