HFMarkets (hfm.com): Market analysis services.

[AllForexnews]

Date: 19th December 2025.

US Inflation Well Below Expectations! Fed Guidance About to Change?
 

An interesting week for investors, with safe haven assets and particularly metals, performing well. The best-performing assets were Palladium, Platinum, Silver and Gold, which are currently outperforming the Stock Market and the US Dollar. Analysts point towards lower inflation and the EU treading a fine line with Russia as the reason for the demand. From the currency market, the US Dollar is the best performing, while stocks have had their worst week of the month.

Though key events have taken place throughout the week which may indicate this may not be a continuing trend. These include the US inflation rate, Bank of England Rate Decision and Oils renewed decline.
 

US Inflation Rate (CPI)

On Thursday afternoon, the US made public its Consumer Price Index for the first time since October 2025. Economists were expecting inflation to rise, as it has done throughout 2025. Nonetheless, the expectations were again incorrect, and inflation actually fell from 3.00% to 2.7%. Analysts deem this to be significantly lower than expectations and can potentially change the guidance they have set for the market.

With the inflation reading 0.4% lower than previous predictions analysts are contemplating whether the Federal Reserve will maintain its hawkishness. Fed indicators such as the Fedwatch Tool and the Fed Dot Plot show no major changes. These indications continue to point to only two rate cuts in 2026 and none for January.

However, with inflation falling to a much healthier level and losing its ‘stickiness’ the market view is likely to change. Considering this is the key requirement for the Federal Reserve, it is possible and many analysts have already spoken about earlier or more frequent cuts. According to the market view the Federal Reserve will either cut another 0.25% basis points in January or will be forced to make frequent cuts thereafter.

As a result, the stock market potentially may find support particularly as institutions look to take advantage of the slight discount in price. Currently, this morning the S&P 500 has risen 0.28% and the NASDAQ 0.60%. In addition, the VIX index is trading 0.75% lower which points towards a ‘risk-on’ sentiment.


 

HFM - S&P 500 15-Minute Chart


Technical analysts also note that the bullish price momentum has risen as the European Session edges closer. If the price momentum is maintained or rises above $25,155.15 (NASDAQ), buy signals potentially may continue to materialise.
 

Other Global Developments

The US is not the only one making headlines this week. Major Central Bank decisions are also stealing the spotlight. A key decision came from the Bank of England, where interest rates were cut by 25 basis points to 3.75%. The Monetary Policy Committee vote was narrowly split, with five members supporting the cut and four opposing it.

In its statement, the BoE said inflation remains above target but will return to 2.0% faster than previously forecast, and stressed that future easing will depend on the inflation outlook. Looking ahead, the BoE is likely to maintain a dovish tone, while Morgan Stanley forecasts three rate cuts in 2026. According to Morgan Stanley these adjustments are likely to come in February, April, and June.

In contrast, the Bank of Japan chose to increase interest rates to 0.75% in order to tackle rising inflation and wages. However, even with the rate hike, the Bank of Japan’s main rate remains lower than economists’ earlier expectations from the start of 2025. In addition, the BoJ governor, Ueda, maintained a neutral tone, not indicating any imminent further hikes. As a result, the Japanese Yen along with the British Pound remain under pressure.
 

Key Takeaways:

• Precious metals outperformed stocks and the US Dollar as investors sought safe havens amid easing inflation and geopolitical uncertainty.
• US inflation fell to 2.7%, well below expectations, challenging the Federal Reserve’s hawkish policy outlook. Monetary Policy Tools maintain their hawkishness but are likely to change.
• Markets increasingly expect earlier or more frequent Fed rate cuts, despite official projections still showing only two cuts in 2026.
• US equities showed early recovery signs as volatility fell and risk-on sentiment returned, supported by improving technical momentum.
• Diverging central bank policies pressured the pound and yen as the BoE cut rates and the BoJ stayed cautious.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[AllForexnews]

Date: 22nd December 2025.

Gold Climbs to All-Time High After Extreme Bullish Momentum.
 

Gold’s price has witnessed one of its strongest recent gains, rising by almost 2% in a short period of time. Gold now trades at an all-time high and has broken above its key resistance level at $4,353.70. All metals trade higher on Monday a few days before Christmas including the best-performing metal, Palladium.

Why is Gold’s price increasing at such speed and is the trend likely to continue in January 2026?


 

HFM - Gold 1-Hour Chart

 

The Federal Reserve and Interest Rates

Gold has at times seen bullish impulse waves during the previous week but has been unable to maintain momentum. However, the recent inflation data and economists expecting rate cuts in 2026 are fuelling stronger momentum during today’s Asian session. The Federal Reserve in December opted for a ‘hawkish cut’, meaning they chose to cut by 0.25% but stay relatively hawkish in their guidance.

The Federal Reserve gave the impression that they believe it would be appropriate to cut on one to two occasions in 2026. However, market participants are expecting a minimum of two cuts, with many pricing in three cuts. The dovish outcome has strengthened as the US inflation rate fell from 3.00% to 2.7%, the lowest since the summer. In addition, analysts forecast the Core Consumer Price Index to fall from 3.0% to 2.6%. This continues to allow the Federal Reserve more room to maneuver.
 

Gold and Geopolitics

According to analysts, the most recent demand for Gold is not derived from Central Banks and governments due to global risks. Reports indicate Gold’s demand is largely coming from large funds and institutions. Nonetheless, the geopolitical sphere is a key element further driving investors to Gold.

The war between Russia and Ukraine is still actively ongoing, even though there has been nearly a month of fairly intense negotiations involving the US, EU, Ukraine, and Russia. However, a recent important factor is developments in Venezuela.

Last week, US President Donald Trump labelled the Venezuelan government a ‘terrorist organization’ and announced a full naval blockade of oil tankers travelling to or from the country. A day earlier, reports said US ships were tracking another vessel, marking the third such incident in recent days. While experts do not rule out ground operations or airstrikes, Trump does not appear eager to further escalate the situation. That said, since September, the US has targeted more than 20 ships in the Caribbean Sea suspected of drug trafficking.

Meanwhile, volatility in the precious metals market has declined again. Data from the Chicago Mercantile Exchange (CME Group) shows that on Friday, investors held 181.09 thousand gold futures contracts and 84.84 thousand options contracts. This compares with last week’s average levels of 217.50 thousand futures contracts and 72.00 thousand options contracts.
 

The US Dollar - A Key Risk For Gold?

Even though Gold’s trend is in line with most analysts’ guidance and expectations, key risks do remain. The US Dollar and Gold are known to be inversely correlated. However, the price of the US Dollar is not necessarily declining enough in order to warrant such a large price movement for Gold.

The US Dollar is witnessing a slight decline on Monday, however, it remains higher than last week’s market open price. In addition, the global stock market remains strong which again does not warrant such high demand for safe-haven assets.

For this reason, even though the trend cannot be ignored or denied, caution regarding retracements and corrections is advisable, according to most analysts. If the price is to correct, price action points towards a potential decline to the range between $4,356.40 and $4,474.80.
 

Key Takeaway Points:

• Gold hit record highs, rising nearly 2% and breaking key resistance at $4,353.70, with other metals also advancing.
• Falling inflation and expected 2026 rate cuts are strengthening gold’s momentum despite the Fed’s relatively hawkish guidance.
• Geopolitical tensions, especially Ukraine and Venezuela developments, are increasing safe-haven demand from large funds and institutions.
• Correction risks remain, as the US Dollar stays firm and equities remain strong. If a retracement is to form, potential pullbacks could aim for the $4,356-$4,475 range.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[AllForexnews]

Date: 23rd December 2025.

End of Year Currency Review & Forecasts: Euro & Japanese Yen.
 

The Euro is the best-performing currency of 2025 while the Japanese Yen is one of the worst-performing. The Euro’s bullishness derives from the Eurozone’s expansionary fiscal policy, Dollar weakness and the demand for European stocks.

The Japanese yen, by contrast, followed a more complex narrative. The Japanese Yen was the best performing currency within the first six months due to interest rate hikes. However, the Yen was the worst performing in the second half of the year and is currently trading with a 3.30% minus.

Are the Euro and Japanese Yen’s Trend likely to continue into 2026?
 

The Euro & Market Forecasts

The Euro Index, which measures the performance of the Euro against four different currencies, trades 0.15% higher. With the US Dollar Index continuing to significantly decline and European stocks maintaining their competitiveness, the Euro continues to strengthen. Many economists believe this is likely to continue in 2026, provided that the US Dollar Index continues to decline.

The European Central Bank was actually one of the most dovish in 2025 cutting interest rates on four occasions. However, the ECB has not cut interest rates for six months now and economists do not expect any cuts in the first quarter of 2026. The Eurozone’s inflation rate is currently at 2.1%, in line with the ECB’s inflation target.

In related developments, José Luis Escrivá, Governor of the Bank of Spain told journalists that he sees no reason to adjust interest rates and expects monetary policy to remain unchanged in the near term. Many other members of the ECB’s voting committee also have kept to this rhetoric. Meanwhile, across the Atlantic, many believe the Federal Reserve may be forced to cut rates more aggressively than it admits.

On the other hand, there are also negatives for the Eurozone such as tariffs and its commitment to Ukraine. Today, Chinese authorities announced the implementation of tariffs of up to 42.7% on dairy products, including cheese, milk, and cream, imported from the European Union. The decision follows the conclusion of an investigation launched in August 2024 into alleged subsidies. According to China’s Ministry of Commerce, these subsidies caused significant harm to the domestic dairy industry. The tariffs will take effect on 23 December. Companies that cooperated with the investigation will face a tariff of 28.6%, while those that did not cooperate will be subject to the full 42.7% rate.


 

HFM - EURUSD 1-Hour Chart


Technical analysis, mainly price action, indicates that EURUSD will maintain its bullish bias while it remains above 1.17640. However, 1.18295 is a key resistance level, which traders will be paying close attention to along with the US Dollar Index. A key support level for the US Dollar Index is 97.10.
 

The Japanese Yen & Government Currency Intervention

The Japanese Yen was the worst-performing currency in the second half of 2025 after failing to meet hawkish expectations. Analysts had expected the Bank of Japan to increase rates to a minimum of 1.00%. However, the BoJ has risen to 0.75% and is reluctant to give a more hawkish outlook for the next quarter. In addition, the recent tensions with China have also dampened sentiment towards the Japanese Yen.

Today, on the other hand, the Japanese Yen is the best-performing currency for two reasons. The first is related to technical analysis and investors taking advantage of its low price while the US Dollar declines. However, a key price driver is the Finance Minister’s recent comments. The country’s finance minister, Satsuki Katayama, told journalists that the government has a ‘free hand’ to make bold decisions in order to support the currency when required.

The comments made by Mrs Katayama suggest that the Japanese government may intervene in the currency market to support the yen. This action would likely occur if the exchange rate rises above 157.00. Though it is important to note, it is not known when they will decide to do so or what price they deem to be too high.

According to analysts, the Japanese Yen can recover and perform better in 2026. However, this is only possible if the Bank of Japan takes a more hawkish approach while other global central banks do not.


 

HFM - USDJPY 1-Hour Chart

 

Key Takeaway Points:

• The Euro was 2025’s top-performing currency, driven by Dollar weakness and strong demand for European assets.
• Policy divergence supports the Euro as the ECB pauses while the Federal Reserve faces pressure to cut rates.
• Despite trade tariffs and geopolitical risks, the Euro maintains a bullish technical and macro outlook.
• A key price driver is the Finance Minister's comments that the government can act freely to support the Yen.
• The Japanese Yen surged early in 2025 but weakened sharply after failing to meet hawkish rate expectations.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.