2025-12-18 13:23:00
The USD is mixed versus the three major currency pairs—EURUSD, USDJPY, and GBPUSD—as the North American session gets underway.
-
EURUSD is trading lower by roughly -0.22%, making it one of the bigger movers against the dollar today, alongside NZDUSD. The focus is squarely on the ECB rate decision at 8:15 AM ET, where no policy change is expected. ECB President Lagarde’s press conference at 8:45 AM ET will be key for guidance on the timing and pace of future easing.
-
USDJPY is trading higher by about 0.10%, as markets remain cautious ahead of the Bank of Japan rate decision tomorrow, keeping volatility contained but directional risks elevated.
-
GBPUSD is marginally higher by 0.07%, rebounding from earlier weakness after digesting what was widely viewed as a hawkish Bank of England rate cut.
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down each of these major pairs from a technical perspective, outlining the bias, risks, and key upside and downside targets as the North American session begins.
Bank of England delivers a hawkish rate cut
The BoE cut rates by 25 basis points to 3.75%, fully in line with expectations following November’s pause, but the tone of the decision was far from dovish.
-
Vote split was a narrow 5–4, underscoring a deeply divided MPC and limiting the dovish signal.
-
Sterling strengthened, with GBPUSD jumping roughly 35 pips, as the Bank signaled that the “easy” part of the easing cycle is over.
-
Governor Bailey said further cuts will be a “closer call”, noting more limited space for easing as rates approach neutral (estimated 2–4%).
-
Inflation has eased to 3.2%, below forecasts, but services inflation remains sticky at 4.4%, and headline CPI is expected to stay above target until Q2 2026.
-
Growth outlook weakened, with the Q4 GDP forecast cut to 0.0% from +0.3%, highlighting ongoing economic fragility.
-
Markets repriced the rate path, pushing the next expected cut from April to June, with around 1–1.5 cuts priced for 2026.
-
UK 2-year gilt yields rose around 5 bps, reflecting the hawkish tone despite the cut.
Bottom line: The BoE delivered the expected cut, but hawkish guidance, a tight vote, and persistent inflation risks point to a slower and more cautious easing cycle, a combination that remains supportive for GBP and restrictive for near-term rate-cut expectations.
US stock futures higher, led by tech and semiconductors
In US pre-market trading, major indices are higher, with the Nasdaq leading the way.
-
The tech sector is getting a strong boost after better-than-expected earnings from Micron, with shares up 13.37% at $255.68.
-
Other chipmakers are also rebounding:
-
Nvidia +1.11%
-
AMD +1.53%
-
Intel +1.97%
-
Index snapshot:
US yield curve: yields lower across key maturities
-
US 2-year yield: 3.462%, -2.3 bps
-
US 5-year yield: 3.674%, -2.1 bps
-
US 10-year yield: 4.137%, -1.4 bps
-
US 30-year yield: 4.823%, -0.5 bps
Other markets: commodities mixed, bitcoin higher
-
Crude oil is trading down -$0.98 or -1.72% at $55.91
-
Gold is trading down -$17.15 or -0.40% at $4,321.69
-
Silver is trading down -$0.103 or -0.16% at $66.10
-
Bitcoin is trading up +$962 or +1.12% at $87,177
