https://www.forextimekr.com/pt-br/market-analysis
Monday, December 8, 2025

The USD/CAD pair trades weakly near its 11-week low around 1.3800 during the Asian trading session on Monday.

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The Loonie pair fell drastically on Friday after the release of the Canadian labor market report for November, which showed that the Unemployment Rate dropped significantly to 6.5% from 6.9% in October due to a significant increase in part-time workers.Full-time jobs created by the Canadian economy in November were 53.6K, slightly lower than 66.6K in October, while economists anticipated that employers would have shed 5K jobs.Strong Canadian employment data has diminished hopes of an interest rate cut by the Bank of Canada (BoC) for the monetary policy scheduled on Wednesday. The BoC is expected to hold interest rates steady at 2.25%.However, the uncertainty over trade relations between the United States (US) and Canada still remains a major hang for the Canadian Dollar. Following the meeting Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum on Friday, US President Donald Trump stated that talks were "very good, very productive", but didn’t clarify on when Washington will resume trade talks with Canada.US President Trump said, “We’ll see,” when asked if he would restart trade talks with his northern neighbour, cbc.ca reported.Meanwhile, the US Dollar (USD) trades with caution ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. The Fed is widely anticipated to cut interest rates by 25 basis points (bps) to 3.50%-3.75% as labor market conditions continue to deteriorate.  Economic Indicator BoC Interest Rate Decision The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country. Read more. Next release: Wed Dec 10, 2025 14:45 Frequency: Irregular Consensus: 2.25% Previous: 2.25% Source: Bank of Canada

China Trade Balance USD came in at $111.68B, above expectations ($100.2B) in November

China Exports (YoY) above expectations (3.8%) in November: Actual (5.9%)

China Imports (YoY) came in at 1.9% below forecasts (2.8%) in November

China Trade Balance CNY rose from previous 640.4B to 792.57B in November

China Exports (YoY) CNY: 5.7% (November) vs -0.8%

China Exports (YoY) came in at 5.7%, above forecasts (3.8%) in November

In an interview with the Italian financial magazine Milano Finanza on Saturday, European Central Bank policymaker Olli Rehn said that "our latest forecast suggests inflation will remain slightly below 2% over the horizon."

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} In an interview with the Italian financial magazine Milano Finanza on Saturday, European Central Bank policymaker Olli Rehn said that "our latest forecast suggests inflation will remain slightly below 2% over the horizon."Additional quotes"The good news is that inflation has stabilized around the ECB's symmetric 2% target, supporting real incomes in Europe.”Urge European Union (EU) leaders to resolve a stalled plan for a Ukraine "repair loan" funded by Russia's frozen assets, calling it "essential, even existential.""Every European should support using frozen Russian assets to help Ukraine.”"I have received encouragement from various parts of Europe.”Market reactionEUR/USD is holding its ground near 1.1650 following these comments, up 0.07% on the day at the press time. ECB FAQs What is the ECB and how does it influence the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. What is Quantitative Easing (QE) and how does it affect the Euro? In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic. What is Quantitative tightening (QT) and how does it affect the Euro? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

West Texas Intermediate (WTI) US Crude Oil prices struggle to capitalize on a three-week-old uptrend and oscillate in a narrow band during the Asian session on Monday.

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The commodity, however, remains close to a two-week high, touched on Friday, and currently trades just below the $60.00 psychological mark, down less than 0.10% for the day.Reuters, citing sources familiar with the matter, reported on Friday that the Group of Seven (G7) countries and the European Union (EU) are in talks to replace a price cap on Russian oil exports with a full maritime services ban. This may curb supplies from the world’s second-largest producer – Russia. Apart from this, a slow progress in the Russia-Ukraine peace talks continues to act as a tailwind for Crude Oil prices.Meanwhile, the growing acceptance that the US Federal Reserve (Fed) will cut interest rates again at the end of a two-day policy meeting later this week, on Wednesday, keeps the US Dollar (USD) depressed near its lowest level since late October. This, in turn, could further act as a tailwind for USD-denominated commodities, including Crude Oil prices, and limit deeper losses, warranting some caution for bearish traders.The upside for the black liquid, however, seems capped on the back of renewed concerns about global supply surplus. In fact, the Organisation of the Petroleum Exporting Countries (OPEC), in its latest monthly report, said that global oil supply is likely to exceed demand in 2026 amid higher expected output from OPEC+ members, including Russia. Adding to this, signs of rising US crude inventories might cap gains for Oil prices.From a technical perspective, Friday's breakout and close above the 50-day Simple Moving Average (SMA) could be seen as a key trigger for bullish traders. This, in turn, suggests that the path of least resistance for the commodity is to the upside and that any meaningful corrective slide could be seen as a buying opportunity. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

The EUR/USD pair posts modest gains around 1.1645 during the early Asian session on Monday. The prospect of a US Federal Reserve (Fed) rate cut at its December meeting on Wednesday could weigh on the US Dollar (USD) against the Euro (EUR).

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The prospect of a US Federal Reserve (Fed) rate cut at its December meeting on Wednesday could weigh on the US Dollar (USD) against the Euro (EUR). Later on Monday, the German Industrial Production and Eurozone Sentix Investor Confidence reports will be published. Markets are currently pricing in a nearly  87% probability of a 25 basis points (bps) rate reduction, which would bring the federal funds rate down to a target range of 3.75%-4.00%. Traders will closely monitor the press conference and a Summary of Economic Projections, or ‘dot-plot,’ for fresh impetus. If the US central bank delivers a "hawkish cut," this could support the Greenback and act as a headwind for the major pair. "We expect to see some dissents, potentially from both hawkish and dovish members," said BNY's head of markets macro strategy Bob Savage in a note to clients.Across the pond, the Eurozone inflation came in slightly higher than expected in November, reducing the immediate pressure for a rate cut from the European Central Bank (ECB). Economists expect the ECB to keep rates on hold at the upcoming meeting on December 18. Growing expectation that the ECB is done cutting interest rates could underpin the EUR against the Greenback in the near term. Goldman Sachs analysts anticipate the deposit rate will stay at 2.0% throughout 2026 unless inflation significantly decreases. Meanwhile, Deutsche Bank economists see a probability of a 25 basis point (bps) rate hike by the end of 2026, citing inflationary pressure. Euro FAQs What is the Euro? The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

The AUD/USD pair enters a bullish consolidation phase at the start of a new week and oscillates in a narrow range near its highest level since September 16, touched on Friday.

.fxs-event-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-event-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-event-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-event-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:12px}.fxs-event-module-section:last-child{border:none;margin-bottom:0}.fxs-event-module-header{color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px;margin:0;padding:4px 0;background-color:#fff;border:none;position:relative;padding-right:32px}.fxs-event-module-header label{cursor:pointer;display:block}.fxs-event-module-header label:after,.fxs-event-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-event-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-event-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]{display:none}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:after{transform:rotate(45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-event-module-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0;margin-top:8px}.fxs-event-module-content.why-matters{max-height:0;overflow:hidden;transition:all .3s ease-in-out}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-content.why-matters{max-height:1000px;margin-top:8px}.fxs-event-module-calendar-title{color:#1b1c23;font-size:17.6px;font-family:Roboto;font-style:normal;font-weight:700;line-height:20.8px;margin:4px 0 0 0}.fxs-event-module-calendar-title-description-wrapper{display:flex;flex-direction:column;gap:12px;border-bottom:1px solid #ececf1;padding-bottom:16px;margin-bottom:16px}.fxs-event-module-inner-calendar{padding:16px}.fxs-event-module-inner-calendar .fxs-event-module-section{padding:0}.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:12.8px;line-height:17px}.fxs-event-module-read-more{display:flex;align-items:center;align-content:center;gap:4px;color:#e4871b;font-size:12.8px;font-family:Roboto;font-style:normal;font-weight:700;line-height:17px;text-decoration:none}.fxs-event-module-read-more svg{width:16px;height:16px}.fxs-event-module-read-more:hover span{text-decoration:underline}.fxs-event-module-release{margin:0;display:flex;flex-direction:column;gap:2px}.fxs-event-module-release>p{font-size:12.8px;font-family:Roboto;font-style:normal;line-height:17px;margin:0}.fxs-event-module-release>p>strong{color:#8c8d91;font-weight:700}.fxs-event-module-release>p>span{color:#8c8d91;font-weight:400}.fxs-event-module-release>p>a{color:#e4871b;font-weight:700;text-decoration:none}.fxs-event-module-release>p>a:hover>span{text-decoration:underline}.fxs-event-module-inner-calendar .fxs-event-module-container{margin:16px 0 0 0;border-top:1px solid #ececf1;padding:12px 0 0 0}@media (min-width:680px){.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:14.72px;line-height:20px}.fxs-event-module-release p{font-size:14.72px;line-height:20px}.fxs-event-module-read-more{font-size:14.72px;line-height:20px}.fxs-event-module-calendar-title{font-size:22.4px;line-height:25.6px}.fxs-event-module-title{font-size:19.2px;line-height:27.2px}.fxs-event-module-header{font-size:19.2px;line-height:25.92px}.fxs-event-module-content{font-size:16px;line-height:21.6px}}AUD/USD kicks off the new week on a subdued note ahead of key central bank event risks.The divergent RBA-Fed policy expectations continue to act as a tailwind for spot prices.Traders now look forward to China’s Trade Balance data to grab short-term opportunities.The AUD/USD pair enters a bullish consolidation phase at the start of a new week and oscillates in a narrow range near its highest level since September 16, touched on Friday. Spot prices currently trade around the 0.6640 region as traders look to China's Trade Balance data for some impetus ahead of this week's key central bank event risks.The Reserve Bank of Australia (RBA) is scheduled to announce its policy decision on Tuesday and is widely expected to leave interest rates unchanged and keep focus on taming inflation. In fact, RBA Governor Michele Bullock admitted last week that inflation is not yet sustainably back within the central bank's 2% to 3% annual target band. Furthermore, Australia's economy grew at its fastest annual pace in two years, which, along with a strong labour market, fueled speculations that the RBA will instead hike interest rates next year. This marks a significant divergence in comparison to dovish US Federal Reserve (Fed) expectations, which keeps the US Dollar (USD) bulls on the defensive and acts as a tailwind for the AUD/USD pair.The recent US macro data pointed to a gradual cooling of the economy, which, along with comments from several Fed officials, suggests that another interest rate cut in December is all but certain. According to the CME Group's FedWatch Tool, traders are currently pricing in a nearly 90% chance that the US central bank will cut interest rates by 25-basis-points (bps) on Wednesday. Traders, however, opt to wait for more cues about the Fed's rate-cut path before placing fresh directional bets, which, in turn, leads to the AUD/USD pair's subdued price action during the Asian session. Hence, the market focus will remain glued to the updated economic projections and Fed Chair Jerome Powell's comments during the post-meeting press conference.In the meantime, China's Trade Balance data could provide some impetus to the Australian Dollar (AUD) and the currency pair. Nevertheless, the aforementioned fundamental backdrop seems tilted firmly in favor of bullish traders and suggests that the path of least resistance for the AUD/USD pair remains to the upside. Hence, any meaningful corrective pullback could be seen as a buying opportunity and is more likely to remain cushioned. Economic Indicator Trade Balance CNY The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY. Read more. Next release: Mon Dec 08, 2025 03:00 Frequency: Monthly Consensus: - Previous: 640.4B Source: National Bureau of Statistics of China

On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 7.0764 compared to Friday's fix of 7.0749.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 7.0764 compared to Friday's fix of 7.0749. PBOC FAQs What does the People's Bank of China do? The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market. Who owns the PBoC? The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts. What are the main policy tools used by the PBoC? Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi. Are private banks allowed in China? Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.

The General Administration of Customs will publish its data for November on Monday at 03.00 GMT. Trade balance is expected to widen to $100.20B in November, compared to $90.07 in the previous reading. Exports are expected to rise by 3.8%, while Imports are projected to climb by 2.8%.

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50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} China’s Trade Balance OverviewThe General Administration of Customs will publish its data for November on Monday at 03.00 GMT. Trade balance is expected to widen to $100.20B in November, compared to $90.07 in the previous reading. Exports are expected to rise by 3.8%, while Imports are projected to climb by 2.8%.As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.How could the China’s Trade Balance affect AUD/USD?AUD/USD trades on a negative note on the day in the lead up to the China’s Trade Balance data. The pair edges lower as markets turn cautious ahead of the Reserve Bank of Australia (RBA) and US Federal Reserve (Fed) interest rate decisions later this week.If data comes in better than expected, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the December 5 high of 0.6650. The next resistance level emerges at the September 16 high of 0.6688, en route to the September 17 high of 0.6707.To the downside, the December 4 low of 0.6598 will offer some comfort to buyers. Extended losses could see a drop to the December 1 low of 0.6532, followed by the 100-day EMA of 0.6520. Economic Indicator Trade Balance USD The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY. Read more. Next release: Mon Dec 08, 2025 03:00 Frequency: Monthly Consensus: $100.2B Previous: $90.07B Source: National Bureau of Statistics of China Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band, around the 1.3320-1.3325 region, during the Asian session.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}GBP/USD is seen consolidating its recent strong gains to the highest level since October 22.Dovish Fed expectations continue to act as a headwind for the USD and support the major.Bulls, however, seem reluctant and opt to wait for the FOMC rate decision on Wednesday.The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band, around the 1.3320-1.3325 region, during the Asian session. Spot prices, however, remain close to the highest level since October 22, touched last Thursday, with bulls awaiting a sustained strength and acceptance above the 100-day Simple Moving Average (SMA) before placing fresh bets.The US Dollar (USD) languishes near its lowest level since late October amid bets that the Federal Reserve (Fed) will cut interest rates again this week, and turns out to be a key factor that continues to act as a tailwind for the GBP/USD pair. Traders, however, seem reluctant to place aggressive directional bets and opt to wait for more cues about the Fed's future rate-cut path. Hence, the focus will remain glued to the updated economic projections and Fed Chair Jerome Powell's comments during the post-meeting press conference.In the meantime, the end of the UK budget uncertainty helps offset bets that the Bank of England (BoE) will cut interest rates this month and benefits the British Pound (GBP), offering additional support to the GBP/USD pair. In fact, UK Chancellor of the Exchequer Rachel Reeves announced a tax hike amounting to an annual £26 billion to fund the fiscal hole, and made a buffer for unforeseen circumstances. This, in turn, favors the GBP bulls and suggests that the path of least resistance for spot prices remains to the upside.Hence, any corrective pullback might now be seen as a buying opportunity and is more likely to remain limited. From a technical perspective, a move beyond the 100-day SMA barrier, currently pegged around the 1.3365-1.3370 region, will be seen as a fresh trigger for bullish traders and assist the GBP/USD pair to build on its recent move up witnessed over the past three weeks or so. In the absence of any relevant economic releases on Monday, traders will take cues from BoE MPC Member Alan Taylor's speech for some impetus. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

Gold price (XAU/USD) trades in positive territory near $4,205 during the early Asian session on Monday. The precious metal edges higher as markets widely expect the Federal Reserve (Fed) to cut interest rates at its December meeting on Wednesday. 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Gold price edges higher to around $4,205 in Monday’s early Asian session. Traders are pricing in a nearly 90% probability of a Fed rate cut on Wednesday. The UoM Consumer Sentiment Index increased to 53.3 in December, stronger than expected. Gold price (XAU/USD) trades in positive territory near $4,205 during the early Asian session on Monday. The precious metal edges higher as markets widely expect the Federal Reserve (Fed) to cut interest rates at its December meeting on Wednesday. Despite inflation remaining above the Fed's 2% target, recent data showing a cooling labour market has increased the likelihood of a rate cut to stimulate economic activity. The US central bank is anticipated to reduce its key interest rate by a quarter-percentage point on Wednesday amid a cooling labor market. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.Additionally, central bank demand for Gold might contribute to its upside. The People’s Bank of China (PBoC) added to its gold reserves for a 13th straight month, according to data released on Sunday. Bullion held by the Chinese central bank rose by 30,000 troy ounces last month, bringing the total to around 74.12 million troy ounces. US consumer sentiment improved in early December, with the index increasing to 53.3 in December from a final reading of 51.0 in November, according to the University of Michigan's Surveys of Consumers. This figure came in stronger than the expectation of 52.0. The upbeat US economic data could boost the US Dollar (USD) and weigh on the USD-denominated commodity price. It’s worth noting that when the Greenback strengthens, gold becomes more expensive for holders of other currencies, which can decrease demand and undermine the Gold prices. Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Japan Trade Balance - BOP Basis dipped from previous ¥4347.6B to ¥2833.5B in October

The Japanese economy contracted 0.6% over the quarter in the third quarter (Q3) of 2025, the final reading released by Japan’s Cabinet Office showed on Monday. This reading came in weaker the market expectation of 0.5% 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} The Japanese economy contracted 0.6% over the quarter in the third quarter (Q3) of 2025, the final reading released by Japan’s Cabinet Office showed on Monday. This reading came in weaker the market expectation of 0.5% 
GDP FAQs What is GDP and how is it recorded? A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted. How does GDP influence currencies? A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate. How does higher GDP impact the price of Gold? When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.

Japan Gross Domestic Product Deflator (YoY) came in at 3.4%, above forecasts (2.8%) in 3Q

Japan Bank Lending (YoY) registered at 4.2% above expectations (4%) in November

Japan Current Account n.s.a. came in at ¥2834B, below expectations (¥3109.5B) in October

Japan Gross Domestic Product (QoQ) registered at -0.6%, below expectations (-0.5%) in 3Q

Japan Gross Domestic Product Annualized came in at -2.3%, below expectations (-2%) in 3Q

Japan Labor Cash Earnings (YoY) came in at 2.6%, above expectations (2.2%) in October

The USD/JPY pair loses ground to near 155.25 during the early Asian session on Monday. The US Dollar (USD) weakens against the Japanese Yen (JPY) as traders brace for the Federal Reserve (Fed) meeting this week, where policymakers are widely expected to cut interest rates.

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The US Dollar (USD) weakens against the Japanese Yen (JPY) as traders brace for the Federal Reserve (Fed) meeting this week, where policymakers are widely expected to cut interest rates. The final reading of Japan’s Gross Domestic Product (GDP) report for the third quarter will be released later on Monday. Traders increased their expectation that the US central bank will deliver a 25 basis points (bps) rate reduction at its December meeting. According to the CME FedWatch tool, financial markets are currently pricing in nearly a 90% chance of a quarter-point rate cut next week. Additionally, the prospect of White House economic adviser Kevin Hassett taking over as Fed Chair could weigh on the Greenback, as he is expected to push for more rate cuts. US President Donald Trump said on Tuesday he plans to announce his choice to succeed Jerome Powell as head of the Fed early next year.Elsewhere, Japan said that Chinese fighter jets twice directed fire-control radar at its F-15 aircraft over international waters near Okinawa, calling the incidents highly unsafe. Defence Minister Shinjiro Koizumi said that the radar “illumination” recorded on Saturday exceeded anything required for routine aviation safety. Koizumi stated that Japan would respond “firmly yet without provocation” to safeguard regional stability. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

Japan said that Chinese fighter jets twice directed fire-control radar at its F-15 aircraft over international waters near Okinawa, calling the incidents highly unsafe, Reuters reported on Sunday.

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