Trump Pressures Fed as Dollar Slips After Cut (12.11.2025)

The Federal Reserve ended 2025 with a 25-bps cut to 3.50-3.75%, maintaining guidance for one cut in 2026.

The decision saw three dissents, while new forecasts showed firmer growth, slightly lower inflation, and steady unemployment. The Fed will also begin buying $40 billion in Treasuries each month to rebuild reserves. Powell noted slowing job growth, cooling inflation, and tariff-driven goods price pressures, stressing data dependence.

Trump called the cut too small and said he will meet with Kevin Warsh as he considers replacements for Powell.

The DXY fell to 98.5 after the third cut of the year. Markets now expect two cuts in 2026, despite the Fed signaling one. Treasury bill purchases begin December 12, alongside projections for stronger growth and still above-target inflation.

Euro Breaks Higher as Eurozone Signals Improve

The euro advanced to 1.17, its strongest level since mid-October, supported by a weaker dollar, firmer ECB messaging, and progress on France’s 2026 social-security reforms. The Fed delivered the expected cut but indicated it may pause in January while assessing new data. At the same time, expectations for further ECB easing faded after policymakers suggested additional reductions may not be needed in 2026. Christine Lagarde confirmed that Eurozone growth projections will be revised upward, and political tension eased after France narrowly approved the reform bill.

EUR/USD holds support at 1.1650, with first resistance at 1.1730.

Yen Firms as BOJ Prepares for a Policy Shift

The yen strengthened toward 155.5 per dollar, extending its rise after the Fed’s cut and calmer tone weighed on the dollar. Focus now moves to the BOJ’s meeting next week, where a rate increase is widely expected after Governor Kazuo Ueda pointed to progress on the inflation goal. Markets will parse his remarks for hints on the 2026 path. Even with renewed momentum, the yen still faces obstacles, slow growth, fiscal strain, and wide rate gaps, while business sentiment among major manufacturers climbed to a one-year high.

USD/JPY sees support at 155.10, with initial resistance near 156.50.

Gold Edges Toward October Highs 

Gold climbed toward $4,223 per ounce, extending its rally for a third session and nearing its October peak. The Fed cut rates as expected and signaled it may slow the pace of easing, though Chair Jerome Powell left the door open to deeper reductions if needed while ruling out hikes. The central bank kept its projection of one 2026 cut but flagged greater uncertainty ahead. Stronger growth forecasts, softer inflation expectations, and elevated geopolitical risks continued to support safe-haven demand.

Gold holds support near $4180, with first resistance at $4260.

Pound Extends Rally as Dollar Loses Ground

The pound pushed toward $1.34, its highest level since October 22, helped by a weaker dollar and fading expectations for additional Bank of England easing in 2026. While the Fed signaled a possible pause in January, markets still assign an 84% chance of a BoE cut next week. Another 25 bp reduction by June is nearly fully priced, with strong odds for April as well. UK traders now turn to Friday’s monthly GDP release for fresh cues.

GBP/USD finds support near 1.3300, with initial resistance at 1.3430.

Silver Retreats From Fresh Highs

Silver eased to around $62 per ounce on Thursday after reaching a record high near $62.87. The pullback followed the Fed’s projection of only one 2026 cut, though room for additional easing was left open. Powell noted that any extra reductions would require solid evidence. The metal remains supported by lower rates and resilient momentum, with the 20-day EMA rising and trend signals staying firmly bullish. The US Dollar Index attempted a mild rebound from a seven-week low but had a limited impact on silver’s overall tone.

Silver holds support around $61.00, with first resistance at $62.70.