U.S. Dollar Starts 2026 Weak as Yen, Euro and Sterling Hold Firm Amid Rate Cut Expectations 
U.S. Dollar Steadies Ahead of Fed Minutes as Markets Eye Policy Divisions 
U.S. Stock Futures Slip as Year-End Trading Turns Cautious 
South Korea Factory Output Misses Forecasts in November Amid Ongoing Economic Uncertainty 
Asian Stock Markets Start New Year Higher as Tech and AI Shares Drive Gains 
Oil Prices Stabilize at Start of 2026 as OPEC+ Policy and Geopolitical Risks Shape Market Outlook 
Citi Forecasts a Volatile but Ongoing Bull Market for S&P 500 in 2026 
Forex Markets Hold Steady as Traders Await Fed Minutes Amid Thin Year-End Volumes 
Gold Prices Rebound in Europe as Geopolitical Tensions and Fed Outlook Support Bullion 
Asian Currencies Trade Flat as Dollar Weakens in Thin New Year Trading 
South Korea Inflation Rises to 2.3% in December, Matching Market Expectations 
Singapore GDP Growth Surges in 2025 but Outlook Remains Cautious Amid Global Trade Risks 
U.S. Stock Index Futures Steady as Markets Await Fed Policy Clues in Holiday-Thinned Trade 
China Manufacturing PMI Rebounds in December, Offering Boost to Economic Growth Outlook 
Federal Reserve Begins Treasury Bill Purchases to Stabilize Reserves and Money Markets 
U.S. Dollar Slides Toward Biggest Annual Loss Since 2017 as 2026 Risks Loom 
South Korea Factory Activity Returns to Growth in December on Export Rebound 
The U.S. dollar hovered near a five-week low on Friday as global investors positioned themselves for a widely anticipated Federal Reserve rate cut next week. The greenback remained under pressure across major currencies, with the yen showing notable strength as expectations rise that the Bank of Japan may resume its rate-hike cycle later in December.
Markets are pricing in a quarter-point rate reduction when the Federal Open Market Committee meets on December 9–10, while traders also anticipate the possibility of two to three additional cuts in 2025, according to LSEG data. The dollar index slipped 0.2% to 98.929 as of 0623 GMT, moving closer to Thursday’s five-week low of 98.765 and setting up a weekly decline of about 0.6%.
The U.S. labor market remains central to the Fed’s decision-making. Initial jobless claims unexpectedly fell to a more than three-year low last week, although analysts caution the Thanksgiving holiday may have distorted the data. Key employment figures typically released in early December have been postponed to mid-month due to delays caused by the recent prolonged government shutdown, which also disrupted several economic reports.
In the absence of fresh jobs data, markets are turning their attention to one of the Fed’s preferred inflation indicators—the core PCE deflator—set for release Friday. Economists expect a modest 0.2% monthly rise in September’s reading, while some analysts, including those at Commonwealth Bank of Australia, see potential for an even softer 0.1% gain, which could further support the case for a rate cut.
Political developments have also weighed on the dollar, with speculation that White House economic adviser Kevin Hassett could succeed Jerome Powell as Fed Chair, raising expectations for a more dovish policy stance.
The dollar slipped 0.3% to 154.46 yen, its weakest level since November 17. Meanwhile, the euro edged up to $1.1659, and the British pound climbed to $1.33505. The Australian dollar advanced to a two-month high at $0.6626, while the Swiss franc strengthened to 0.8026 per dollar.
Global central banks are set for a busy stretch of policy decisions over the next two weeks, keeping currency markets on alert as investors assess the shifting monetary landscape.
