Forex Market Update: Fed Rate Cut and Economic Calendar
Global markets started the week with heightened focus on central bank decisions and key economic data. The US Dollar remained under pressure following the Fed’s widely anticipated interest rate cut, while investors positioned themselves ahead of the Bank of England’s (BoE) upcoming meeting. Traders will closely monitor US Non-Farm Payrolls, CPI releases, and European economic indicators, as ongoing central bank uncertainty is expected to drive volatility across major currency pairs including EURUSD and GBPUSD. This report provides a technical and fundamental overview to guide traders through the week ahead.
EURUSD Rises as Fed Rate Cut Fuels Dollar Weakness
EURUSD closed last week’s trading session higher following the Fed’s interest rate cut decision. As widely expected, the central bank reduced the interest rate by 0.25%. During a press conference and according to the released minutes, markets traded with mixed sentiment as uncertainty grew due to divisions within the Fed’s board regarding the future path of rates.
Several members raised concerns about further rate reductions, while others signaled that a maximum of one or two additional cuts could be delivered in 2026. This division and uncertainty weighed negatively on the US Dollar, pushing the pair higher into this week’s trading session.
Looking ahead, traders and investors will mainly focus on the US Nonfarm Payrolls report due to be released on Tuesday and US CPI data on Friday. Speeches from Fed members will also be closely followed, as ongoing divisions within the central bank are likely to generate increased volatility for the US Dollar.
Market Drives, Technical Setup, and Position Sentiment
On the economic calendar, Tuesday brings the European Manufacturing PMI, expected to improve to 49.9, alongside US Nonfarm Payrolls, with job creation forecast at 35K and average hourly earnings expected to rise by 0.3%. On Wednesday, the European Harmonized Index of Consumer Prices is expected to remain steady at 2.4%. On Friday, the US CPI is expected to come in higher at 3.2%.
Technically, the pair remains positive after last week’s close above 23.6% at 1.1739. Traders’ long positions took profits above 1.1700, while sell positions are targeting profits near 1.1500.
Position sentiment: BUY 20% – SELL 80%
GBPUSD chart, December 13, 2025. Source: TenTrade.com
GBPUSD Supported by Fed Rate Cut Ahead of BoE Meeting
GBPUSD closed last week’s trading session higher on the Fed’s interest rate cut decision. As widely expected, the central bank reduced interest rates by 0.25%. However, during the press conference and according to the released minutes, markets traded with mixed sentiment as uncertainty increased due to divisions within the Fed’s board over the future path of interest rates.
A number of members raised concerns about further rate reductions, while others signaled that a maximum of one or two additional cuts could be delivered in 2026. This division and uncertainty weighed negatively on the US Dollar, pushing the pair higher into this week’s trading session. As for the GBP, traders and investors have been pre-positioning ahead of this week’s BoE’s meeting.
As for this week, traders and investors will mainly focus on the US Nonfarm Payrolls report due to be released on Tuesday and US CPI data scheduled for Friday. Speech from Fed members will also be closely monitored, as the ongoing division within the central bank is expected to generate increased volatility in the US Dollar. The BoE interest rate decision is due on Thursday, with the central bank widely expected to keep rates unchanged. The press conference and meeting minutes will be key in shaping expectations for the BoE’s future policy path.
Key Data Releases and Technical Levels to Watch
On the economic calendar, Tuesday features the UK ILO unemployment rate, expected to rise to 5.1%, alongside the UK Services PMI, forecast at 51.3. The US Nonfarm Payrolls report is expected to add 35K new jobs with average hourly earnings pointing higher at 0.3%. On Wednesday, the UK Consumer Price Index is expected to remain steady at 3.4%. On Friday, US CPI is expected to come in higher at 3.2%.
Technically, the pair remains neutral after last week’s close just below 38.2% at 13368. Long positions are still open between 1.3369 and 1.3100, targeting profits above 1.3500, while short positions are targeting profits near 1.3100.
Position sentiment: BUY 60% – SELL 40%.
GBPUSD chart, December 13, 2025. Source: TenTrade.com
Key Takeaways
EURUSD rose after the Fed cut rates by 0.25%.
GBPUSD gained as markets pre-positioned ahead of the BoE meeting.
Fed divisions on future rates are increasing US dollar volatility.
Key US data this week includes Non-Farm Payrolls and CPI.
Technical levels: EURUSD long profits above 1.1700, GBPUSD neutral near 1.3368.
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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