Forex Today: All eyes on the BoC and Fed policy announcements
Here is what you need to know on Wednesday, December 10:
Markets remain on tenterhooks in the run-up to the all-important US Federal Reserve's (Fed) monetary policy announcements due later in the North American session on Wednesday.
The US Dollar (USD) has paused its recent recovery against its six major currency rivals, as traders prefer to stay on the sidelines, refraining from taking any directional bets before the Fed verdict.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.07% | -0.09% | -0.00% | -0.11% | 0.02% | -0.01% | |
| EUR | 0.05% | 0.00% | -0.05% | 0.06% | -0.06% | 0.08% | 0.04% | |
| GBP | 0.07% | -0.00% | -0.04% | 0.06% | -0.05% | 0.09% | 0.05% | |
| JPY | 0.09% | 0.05% | 0.04% | 0.10% | -0.01% | 0.11% | 0.09% | |
| CAD | 0.00% | -0.06% | -0.06% | -0.10% | -0.11% | 0.01% | -0.01% | |
| AUD | 0.11% | 0.06% | 0.05% | 0.01% | 0.11% | 0.13% | 0.10% | |
| NZD | -0.02% | -0.08% | -0.09% | -0.11% | -0.01% | -0.13% | -0.04% | |
| CHF | 0.01% | -0.04% | -0.05% | -0.09% | 0.00% | -0.10% | 0.04% |
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).
The Fed is widely expected to lower interest rates by 25 basis points (bps) to 3.5%-3.75% following its December policy meeting, but the Dot Plot chart, Federal Open Market Committee (FOMC) board vote split and Chairman Jerome Powell’s comments will hold the key to gauge the path forward on rates in 2026.
Traders are bracing for a hawkish tone from the Fed as concerns over inflation could overshadow the recent signs of a slowing labor market.
Meanwhile, the focus will also be on US President Donald Trump’s plans to begin his final round of interviews, with an interview with former Fed Governor Kevin Warsh on Wednesday.
Kevin Hassett, White House Economic Adviser and Trump’s top pick for the next Fed Chair, said on Tuesday that there is "plenty of room" to cut interest rates further, though he added that if inflation rises, the calculation may change, per Reuters.
On the economic data front, the Labor Department's Bureau of Labor Statistics (BLS) said on Tuesday that Job Openings, a measure of labor demand, were up 12,000 to 7.670 million by the last day of October.
US private sector firms added an average of 4,750 jobs per week in the four weeks ending November 22, according to data released Tuesday by Automatic Data Processing (ADP).
Earlier in the Asian session on Wednesday, China’s National Bureau of Statistics (NBS) showed that the country’s Consumer Price Index (CPI) rose at an annual rate of 0.7%, coming in line with the market expectations, but the monthly CPI fell 0.1%, signalling persistent deflationary pressures.
AUD/USD reverses dismal Chinese inflation data-led dip in early Europe, back in the green near 0.6650 amid a broadly subdued US Dollar.
The big mover in Asia was the Japanese Yen (JPY), initially reaching two-week lows against the USD near 157.00 before rebounding on expectations of the Fed and the Bank of Japan (BoJ) monetary policy divergence and Japan’s verbal intervention. Japanese Prime Minister Sanae Takaichi noted on Wednesday that “the government will take appropriate action against excessive and disorderly moves.” USD/JPY is on the back foot near 156.75, as of writing.
USD/CAD trades in a tight range at around 1.3850, awaiting the Bank of Canada (BoC) policy stand pat after lowering the benchmark rate to a three-year low of 2.25% in October.
EUR/USD sees subdued trading activity below 1.1650 at the start of the European session. European Central Bank (ECB) President Christine Lagarde is due to participate in a moderated discussion about the futures of the Euro and the USD as global currencies at the Financial Times Global Boardroom Conference, in London, at 10.55 GMT.
GBP/USD has regained the 1.3300 level, although it seems to lack follow-through buying interest. Bank of England (BoE) Governor Andrew Bailey is due to participate in a pre-recorded fireside chat on financial stability at the Financial Times (FT) Global Boardroom Conference in London.
Gold stays defensive but holds above $4,200 early Wednesday. Silver refreshed record highs well past the $61-mark.
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