Trade British Pound / US Dollar (GBPUSD)

The dollar index steadied around 108.4 on Friday, its highest since November 2022, as investors awaited the PCE price index.

Recently, divergences in monetary policies among major central banks and economic uncertainties have caused volatility in financial markets. The Fed's signal of limited rate cuts strengthened the dollar, putting pressure on other G10 currencies and commodities. 

Markets remained cautious as the Fed prepared for a widely expected 25bps rate cut.

Global markets faced a complex blend of central bank signals, political uncertainties, and mixed economic indicators on Tuesday.

The Federal Reserve is expected to implement another 25bps rate cut at its final meeting of the year.

Markets navigated a challenging environment as the euro slipped near a two-year low following another ECB rate cut and hints of further easing. 

Gold paused after a three-day rally as investors analyzed US inflation data, which showed headline inflation rose as expected and core inflation remained steady.

The US dollar maintained its strength as investors awaited the US inflation report that could influence Federal Reserve policy.

The euro hovered near $1.05 as traders braced for another ECB rate cut and grappled with Eurozone uncertainties, including political unrest and subdued economic indicators. Meanwhile, the yen remained steady as the BOJ weighed possible interest rate hikes, and gold gained ground amid Chinese policy shifts and tensions in the Middle East. 

The euro remained steady near $1.06 following renewed confidence in French political stability and clearer indications of policy easing from the European Central Bank. President Macron’s initiative to appoint a new prime minister and secure the 2025 budget calmed investor nerves, while markets anticipate a 25 bps ECB rate cut next week, bringing the total expected easing through mid-2025 to 125 bps. Meanwhile, strong US jobs data increased bets on a December Fed cut, underscoring resilient economic conditions and global monetary policy shifts that keep the currency markets on edge.