– Written by


David Woodsmith

STORY LINK Pound to Dollar Rate JUMPS as FED to Pause After Today’s Rate Cut

The Pound to Dollar exchange rate (GBP/USD) rallied to 1.33828 on Wednesday after the Fed cut rates by 25bps but signalled a higher bar for further easing, according to Wells Fargo. “The FOMC reduced the fed funds target range and signaled that additional easing will face a higher bar at its next meeting.”

Despite hawkish dissents, Wells Fargo notes the Fed still maintains an easing bias into 2025, with its policy-rate outlook unchanged. “The Committee maintains an easing bias, with the median 2025 rate unchanged at 3.375%.”

The bank expects the Fed to slow, not end, the easing cycle. “We continue to look for two more 25bps cuts next year.”

Wells Fargo adds that new reserve-management purchases are technical only. “RMPs will have no bearing on our view of the stance of monetary policy.”

PRE-FED:

GBP/USD found some support below 1.3300 and is trading around 1.3320 with a firm dollar limiting scope for any fresh advance.

The Federal Reserve policy decision is likely to be crucial for near-term direction with choppy trading and potential short-term dollar gains if the Fed is cautious over the scope for 2026 rate cuts.

Although noting the potential for dollar gains after the Fed decision, ING added; “but the release of what should be soft jobs data next week and seasonal December weakness suggest that today’s dollar rally might not last.

According to UoB; “today, there is scope for GBP to test 1.3265 before a recovery can be expected. Based on the current momentum, a clear break below this level is unlikely. On the upside, resistance levels are at 1.3330 and 1.3355.

IG Group commented; “The early September low at $1.33 is now being fought over, but a close above here helps to reinforce the bullish view.”

There are very strong expectations that the Fed will cut rates later on Wednesday by a further 25 basis points to 3.75% with the main focus on the policy outlook.

ING commented; “The big focus will be the Summary of Economic Projections (SEP), the number of dissenters against the 25bp cut, and then Chair Powell’s press conference.”

BNY Americas macro strategist John Velis commented; “The post-meeting press conference could be – as always – a wild card.”

There is the risk of relatively hawkish comments from Chair Powell and some dissents against the December decision to cut rates.

MUFG commented; “Given the divisions over the outlook it will be difficult for Powell to send a strong message of pause but no doubt by reaching a consensus the message will certainly be that the Fed have been pro-active and can now assess incoming data.”

Some members will also be reluctant to forecast further significant cuts for next year.

BNY’s Velis added; During recent FOMC pressers, Chair Powell’s tone has often departed from the actual policy action taken or the statement accompanying that action. We could easily see a rate cut, a dovish set of dots, and a somewhat hawkish qualitative assessment at Wednesday’s press conference.”

ING commented; “While all the above sounds dollar positive, it is also widely expected. And perhaps it is still a surprise that the rates market still has so much easing priced in. Presumably, this is the Kevin Hassett effect, where his arrival at the Fed in February can throw a dovish cloak over the FOMC outlook.”

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TAGS: Pound Dollar Forecasts

– Written by


Frank Davies

STORY LINK Pound to Dollar Price Forecast: GBP Steady with “Dots to Dictate Reaction”

The Pound to Dollar exchange rate (GBP/USD) traded steadily above $1.33 on Wednesday as markets positioned themselves ahead of the Federal Reserve’s final interest rate decision of the year.

At the time of writing, GBP/USD was trading near $1.3310, almost unchanged from the start of the session.

The US Dollar (USD) was muted through Wednesday’s European trade as investors assessed the likely outcome of the Federal Reserve’s evening policy announcement.

Expectations around a December rate cut have swung sharply in recent weeks, but market consensus has now solidified around a 25-basis-point reduction.

With the move largely priced in, attention has shifted to what may come next. Forward guidance from the Fed still holds the potential to move the Dollar, especially if Chair Jerome Powell strikes a firmer tone, as he did following October’s meeting.

According to Scotiabank, “After USD gains earlier this week and markets perhaps expecting a (mildly) “hawkish cut” today, traders are poorly positioned for messaging that leans somewhat dovish.

“After a 25bps cut today, swaps do not have another rate cut fully priced in until mid-2026.

“Beyond the rate decision, forecasts and the dots will dictate the market’s reaction.

“No changes are expected in the median dot for the next few years.

“The consensus does expect a mild nudge lower for the long-term median (i.e., terminal rate) dot to 3%, however, which would align a little closer to current market thinking.”

Traders will also parse the updated Summary of Economic Projections (SEP). Should policymakers maintain guidance for just one rate cut in 2026, compared with market expectations for at least two, the US Dollar could receive renewed support.

The Pound (GBP) treaded water on Wednesday, with the absence of UK economic data leaving Sterling without a clear catalyst.

Price action was largely guided by broader market sentiment, with traders hesitant to establish strong positions ahead of the Fed’s announcement.

This caution kept the Pound rangebound, contributing to the subdued tone across GBP/USD markets.

GBP/USD Forecast: Modest UK GDP Uptick to Provide Limited Support?

Beyond the Fed decision, focus will shift to the UK’s upcoming GDP release for October.

Economists expect the data to show the economy returning to growth for the first time since June, although only by around 0.1%. Such a muted rebound may provide limited support for Sterling and could instead reinforce concerns over the UK’s lacklustre economic trajectory.

Weak growth prospects would likely strengthen expectations of a Bank of England (BoE) interest rate cut next week, potentially limiting GBP upside.

On the US front, the Dollar may encounter headwinds on Thursday if initial jobless claims point to a larger-than-expected rise in early December, adding weight to the argument for a more accommodative Fed.

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TAGS: Pound Dollar Forecasts

– Written by


David Woodsmith

STORY LINK Fed LIVE: Test for Pound Sterling Bulls, GBP/USD Dependent on Dip Buyers?

The Pound to Dollar (GBP/USD) exchange rate has found some support below 1.3300 and is trading around 1.3320 with a firm dollar limiting scope for any fresh advance.

The Federal Reserve policy decision is likely to be crucial for near-term direction with choppy trading and potential short-term dollar gains if the Fed is cautious over the scope for 2026 rate cuts.

Although noting the potential for dollar gains after the Fed decision, ING added; “but the release of what should be soft jobs data next week and seasonal December weakness suggest that today’s dollar rally might not last.

According to UoB; “today, there is scope for GBP to test 1.3265 before a recovery can be expected. Based on the current momentum, a clear break below this level is unlikely. On the upside, resistance levels are at 1.3330 and 1.3355.

IG Group commented; “The early September low at $1.33 is now being fought over, but a close above here helps to reinforce the bullish view.”

There are very strong expectations that the Fed will cut rates later on Wednesday by a further 25 basis points to 3.75% with the main focus on the policy outlook.

ING commented; “The big focus will be the Summary of Economic Projections (SEP), the number of dissenters against the 25bp cut, and then Chair Powell’s press conference.”

BNY Americas macro strategist John Velis commented; “The post-meeting press conference could be – as always – a wild card.”

There is the risk of relatively hawkish comments from Chair Powell and some dissents against the December decision to cut rates.

MUFG commented; “Given the divisions over the outlook it will be difficult for Powell to send a strong message of pause but no doubt by reaching a consensus the message will certainly be that the Fed have been pro-active and can now assess incoming data.”

Some members will also be reluctant to forecast further significant cuts for next year.

BNY’s Velis added; During recent FOMC pressers, Chair Powell’s tone has often departed from the actual policy action taken or the statement accompanying that action. We could easily see a rate cut, a dovish set of dots, and a somewhat hawkish qualitative assessment at Wednesday’s press conference.”

ING commented; “While all the above sounds dollar positive, it is also widely expected. And perhaps it is still a surprise that the rates market still has so much easing priced in. Presumably, this is the Kevin Hassett effect, where his arrival at the Fed in February can throw a dovish cloak over the FOMC outlook.”

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TAGS: Pound Dollar Forecasts

Created on December 10, 2025

EUR/USD Analysis Summary Today

• Overall Trend: Neutral.
• Support Levels for EUR/USD Today: 1.1590 – 1.1520 – 1.1470.
• Resistance Levels for EUR/USD Today: 1.1680 – 1.1760 – 1.1820.

EUR/USD Trading Signals:

• Buy EUR/USD from the support level of 1.1540 with a target of 1.1800 and a stop-loss at 1.1480.
• Sell EUR/USD from the resistance level of 1.1740 with a target of 1.1500 and a stop-loss at 1.1800.

Technical Analysis of EUR/USD Today:

Dear reader, as observed in market performance, the EUR/USD pair is showing stability within a short-term ascending triangle pattern, with the price currently testing the horizontal resistance level at the psychological mark of 1.1650. This chart pattern typically signals bullish continuation, suggesting the possibility of an upward breakout. The EUR/USD is trading around the 1.1645 level, hovering just below the resistance area that has capped gains since late November.

A decisive break above this ceiling could lead to a measured ascent equal to the height of the triangle pattern, targeting the 1.1750 level or higher. This would confirm a shift in momentum and restore buyer control over the market. However, if the resistance holds, the EUR/USD pair may retreat to test support levels within the triangle. The ascending trend line, which connects the pair’s lows since mid-November, lies around the 1.15500 support level, coinciding with the dynamic support of the 100-day Simple Moving Average (SMA) and the 200-day SMA. Technically, these moving averages have recently converged and begun to flatten, reflecting market indecision.

Meanwhile, the convergence of the 100- and 200-period SMAs suggests that a breakout in either direction could determine the next move for the currency pair. A bounce off the trend line support would keep the triangle intact and pave the way for another attempt to break above the top. The Stochastic oscillator is currently hovering in the middle, showing neither strong buying nor selling pressure. The oscillator has room to rise towards overbought territory, which could support a potential upside if resistance is broken.

The Relative Strength Index (RSI) is also in neutral territory around the 50 level, allowing for movement in either direction. An upward move would indicate strengthening bullish momentum, while a decline might suggest that sellers are successfully defending the resistance zone.

Trading Tips:

Dear TradersUp trader, be cautious. The EUR/USD pair may be affected by the eagerly awaited FOMC decision today, where the Federal Reserve is expected to cut US interest rates, perhaps signaling a more cautious pace for future monetary policy easing.

Euro/Dollar Trading Influenced by the Future of ECB Policies

According to Forex currency market trades, a “hawkish” bias in Eurozone interest rate expectations is supporting the EUR/USD exchange rate. In this context, an influential European Central Bank (ECB) official stated that she is comfortable with current market bets that the Eurozone central bank’s next move will be a rate hike. Isabel Schnabel, a member of the ECB Governing Council, stated in an interview earlier this week that “markets and survey participants expect the next step to be a rate hike, even if it is not soon. I am quite comfortable with this expectation.”

Jana Randow, who conducted the interview with Schnabel for Bloomberg, said she was “surprised by the ‘hawkish’ nature of her stance.” She added: “Of course, we knew she had these ideas, but hearing her be so explicit that the next move will likely be a rate hike… was certainly news we didn’t expect from her.”

Across reliable trading platforms, the surprise was reflected in Eurozone bond yields outperforming US and UK bond yields, mirroring the shift in expectations regarding the ECB’s interest rate policy. Expectations for the ECB’s rate path have risen.

Technically, the euro/dollar exchange rate reached a resistance level of 1.1672 and is maintaining its gains this December, remaining above its key 55-day moving average. The recent weakness of the US dollar is not the only factor supporting the euro against the dollar. Last week, Germany boosted the euro when German factory orders rose 1.5% in October, five times the market expectation of 0.3%, and September’s reading was revised upwards from 1.1% to 2.0%.

French industrial production also surprised expectations, exceeding forecasts with a 0.2% increase compared to the anticipated 0.1% decline. Spanish output rose 0.7%, surpassing expectations of 0.5%. Overall, the strong growth trajectory and persistently high inflation reinforce Schnabel’s argument for keeping interest rates unchanged.

Regarding the future of monetary policy, with the US Federal Reserve poised to cut interest rates today, the divergence in interest rate policies between the US and the Eurozone will continue to strengthen the euro against the US dollar.

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– Written by


David Woodsmith

STORY LINK British Pound-to-Dollar Forecast: GBP Struggles to Hold 1.33 Ahead of Fed

The Pound to Dollar exchange rate (GBP/USD) drifted toward 1.3315 as markets turned cautious ahead of the Fed decision and doubts emerged over how far US rates can fall next year.

Support above 1.33 looks fragile, especially if Powell delivers a hawkish tone alongside an expected cut.

With a BoE move also priced in for next week, direction now hinges on central-bank messaging.

GBP/USD Forecasts: Battles to Hold 1.33

The GBP to USD rate has not been able to make headway on Tuesday and has drifted to around 1.3315 amid narrow ranges.

According to UoB; “the price action still appears to be part of a range-trading phase. Today, we expect GBP to trade between 1.3290 and 1.3350.”

Convera FX and macro strategist Antonio Ruggiero commented; “sterling is holding above $1.33 for now, but support looks fragile ahead of the Fed meeting and could slip if Jerome Powell, the Fed chair, sounds hawkish.”

Markets remain very confident that the Bank of England will cut interest rates at next week’s meeting, although a split vote is very likely.

In testimony to the Treasury Select committee, MPC member Mann maintained concerns over core inflation and it will be difficult to convince her to back a rate cut next week.

Federal Reserve policy will remain a key element for markets.

There are still very strong expectations that the Fed will cut interest rates by a further 25 basis points on Wednesday. There has been no unofficial push back from Fed officials and it will now be a major surprise if rates are not lowered.

Markets, however, are slightly less confident that rates will be cut again early in 2026.

The shift in expectations surrounding global rates has also triggered doubts whether the US central bank can continue to lower rates throughout 2026.

ING commented; “the reassessment of the Fed easing cycle proved the bigger story. There are now high expectations of a ‘hawkish cut’ at Wednesday evening’s FOMC decision.

Markets will monitor comments from Chair Powell and also note the new interest rate forecasts from committee members.

ING added; “With market pricing of further Fed easing still vulnerable, we suspect the dollar’s downside is limited into the Fed meeting.

As far as data is concerned, the NFIB small-business confidence index improved to 99.0 for November from 98.2 the previous month.

NFIB Chief Economist Bill Dunkelberg commented; “Although optimism increased, small business owners are still frustrated by the lack of qualified workers. Despite this, more firms still plan to create new jobs in the near future.”

The latest ADP weekly data indicated that private employers added a small number of jobs in the latest week.

The evidence suggests that there has not been further labour-market deterioration which will make it more difficult for the Fed to justify lower rates.

There will still be concerns over threats to Fed independence amid the appointment of a new Chair and potential changes to the board.

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TAGS: Pound Dollar Forecasts

• USD/JPY forecast remains mildly soft ahead of the FOMC rate decision.
• Next Fed Chair headlines keep the markets uncertain.
• Technically, the price could test the 200-day moving average before accumulating sufficient buying.

The USD/JPY price traded with mild softness on Tuesday as the Dollar Index drifted lower following fresh headlines about the next Fed leadership. The US dollar also remains under pressure amid the looming Fed rate decision today. Meanwhile, the US JOLTS Job Openings data provided some relief to the pair.

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The delayed data showed a slight improvement in the labor markets, but the figures are not strong enough to dispel the cooling signs. The job openings are drifting to multi-year lows, highlighting that the labor market conditions are easing rapidly than expected. The data holds more weight, as it is the final indicator before the Fed’s rate decision, with the November NFP data set scheduled for release next week. This cements the dovish Fed odds, with almost certain rate cut.

Political developments are also affecting the markets. According to the Wall Street Journal, the US President is preparing a final round of interviews with potential candidates to replace Fed Chair Powell. The news injected uncertainty into global markets, particularly regarding the Fed’s monetary policy path for 2026. Kevin Warsh, a potential candidate, is viewed as more hawkish than Kevin Hassett. Market participants remain sensitive to the leadership shift, as it could alter expectations for Fed policy.

From the Japanese side, the yen remains bid due to safe-haven flows as the global risk sentiment softened ahead of the key FOMC decision. The Bank of Japan continues to offer no new catalyst to the market, while its policy remains accommodative and yields are contained; the USD/JPY pair still depends on the Fed and US economic data.

USD/JPY Key Events Ahead

Today’s essential data ahead of the FOMC decision is the Employment Cost Index, which can provide a temporary impetus to the market. Overall, the pair remains vulnerable to further downside if US yields continue to ease after the soft JOLTS print.

Traders are now watching Powell’s press conference and the updated dot plot for clues on how aggressively the Fed intends to cut rates through 2025. Until then, USD/JPY is likely to trade with a mild bearish bias, lacking conviction to the upside.

USD/JPY Technical Forecast: Correction Before Upside

The 4-hour chart for USD/JPY shows a bullish crossover of 20- and 50-period MA. However, the 100- and 200-period MAs stay flat, pointing to a lack of market catalyst. Meanwhile, the RSI is flat near the overbought region. The conditions suggest a potential pullback to 156.00 before the upside continuation.

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Conversely, moving below the 156.00 mark could augment selling pressure, moving to the 200-period MA and the demand zone near 155.00.

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There is no change on copper price, despite forming mixed trading due to its stability above the extra support near $5.1300, increasing the chances of its activation with the positivity of the main indicators.

Stochastic stability within the overbought level will provide new positive momentum to ease the mission of resuming the bullish attack, reminding you that the stability of the next main target near $5.5000, while the decline below the current support might force it to form temporary corrective trading, and there is a chance for the decline towards $4.9500 reaching the main support near $4.7500.

The expected trading range for today is between $5.1850 and $5.5000

Trend forecast: Bullish

There is no change on copper price, despite forming mixed trading due to its stability above the extra support near $5.1300, increasing the chances of its activation with the positivity of the main indicators.

Stochastic stability within the overbought level will provide new positive momentum to ease the mission of resuming the bullish attack, reminding you that the stability of the next main target near $5.5000, while the decline below the current support might force it to form temporary corrective trading, and there is a chance for the decline towards $4.9500 reaching the main support near $4.7500.

The expected trading range for today is between $5.1850 and $5.5000

Trend forecast: Bullish

Image © Adobe Images

The British pound will come under pressure against the euro next year as the UK economy suffers rising unemployment.

Given this, strategists at CIBC Capital Markets make buying EUR/GBP a top trade for 2026, judging that a recent pound sterling rebound will falter.

“Sterling witnessed something of a relief rally in the wake of Chancellor Reeves second Budget; the uptick in the fiscal headroom was greeted by some relief by Gilt investors,” says CIBC in a strategy note detailing top trades for the coming year.

“However, we would note the downgrade to GDP assumptions, deterioration in labour market trends and or substantive CPI base effects which are set to impact into Q2,” it adds.

EUR/GBP is has fallen during November and December as the 2025 selloff unwinds. Part of that weakness was linked to fears for UK economic growth and fiscal stability owing to the November budget.

The contents of the budget were well telegraphed by a series of leaks from the Treasury, and with no real surprises being announced on the day, the market has covered some of its bets against the pound.

For now, GBP/EUR upside is seen as a counter-trend bounce.

In our Pound to Euro Week Ahead Forecast, we note near-term momentum remains in favour of further upside, fulfilling earlier expectations for a year-end post-budget bounce in the pound.

However, upside will ultimately be limited by unhelpful fundamentals. CIBC’s analysts cite the following headwinds:

1. Slower GDP trajectory
2. Subdued gains in real disposable incomes
3. A rising tide of unemployment (dragging on earnings growth)

This “supports a faster pace of BoE adjustment; we assume 50bps of easing by the end of Q1, beyond the current 39bps priced by the market,” says CIBC.

Above: The Bank of England will cut interest rates faster than anticipated, warns CIBC.

“A more aggressive BoE profile supports the notion of EUR/GBP gains, given we expect the eurozone to benefit from German fiscal expansion, defence spending under the ReArm process in addition to ECB inertia, given policy remains in a good place,” it adds.

CIBC economists consider 3.50% to be the landing zone for Bank Rate.

This “supports EUR/GBP heading back towards 2023 highs.” The EUR/GBP high is 0.8865 (Nov. 14), giving a GBP/EUR low of 1.1280.

GBP/EUR Year-End 2025

Built from leading bank forecasts.

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Against the Tide

Weak GBP is a consensus expectation for 2026, but some analysts are taking the other side of that bet, suggesting lower UK interest rates could be supportive.

“Pessimism toward the UK is too high in our view. We believe the Bank of England now has more scope to cut rates, and retail sales appear to be on an uptrend. Economic growth could surprise positively in 2026 and support UK markets,” says Brian Levitt, Chief Global Market Strategist at Invesco.

Bank of America is also contrarian, saying the pound will outperform peers in 2026, as consensus positions tend to fizzle out early in the year.

With the budget having passed without drama, the pound is at a fork in the road: does that risk premium dissipate or does it become entrenched?

Bank of America thinks the former is the most likely: that premium can continue to lift, and the pound will recover as a result.

“This Budget has the buy-in from the OBR (who prepare macro forecasts for the Government) and the Chancellor has reinforced the commitment to keep the Fiscal Rule and raise the Fiscal Headroom. These are important anchors which should lead to a relief rally in GBP as the release valve of event risk has passed,” reads Bank of America’s year-ahead outlook.

BofA forecasts EUR/GBP at 0.84 by year-end, which gives a pound to euro conversion of 1.19.