Forecasting the upcoming week: It’s all about the Federal Reserve

The US Dollar (USD) remained on the back foot this week, continuing the broad downward trend that has been in place since late November. As usual in the last few days, expectations for a more dovish Federal Reserve in 2026 as well as steady bets for a rate cut next week continued to keep the buck under persistent pressure.

The US Dollar Index (DXY) added to the prior week’s pullback, deflating below the 99.00 support to hit new multi-week troughs ahead of the upcoming FOMC gathering. The NY Fed will release its Consumer Inflation Expectations on December 8. On December 9 comes the NFIB Business Optimism Index, the ADP Employment Change Weekly, JOLTs Job Openings, and the API’s weekly report on US crude oil inventories. The Fed meeting takes centre stage on December 10, followed by the usual weekly MBA Mortgage Applications, the Employment Cost data and the EIA’s weekly report on US crude oil stockpiles. The usual weekly Initial Jobless Claims will be released on December 11, alongside the Balance of Trade results and Wholesale Inventories.

EUR/USD advanced for the second week in a row, this time briefly surpassing the 1.1680 level to hit new seven-week highs. Industrial Production in Germany is due on December 8, while the Balance of Trade results will be released on December 9. In addition, Germany’s final Inflation Rate will be published on December 10. On December 11, Industrial Production readings in the euro bloc are due alongside Germany’s Wholesale Prices.

In line with the rest of the risk complex, GBP/USD clocked marked gains this week, breaking above the 1.3300 barrier for the first time since late October. The BRC Retail Sales Monitor is due on December 9, followed by the RICS House Price Balance on December 11. A very interesting docket comes on December 12 with the releases of GDP figures, Balance of Trade, Industrial and Manufacturing Production, Construction Outout, and the NIESR Monthly GDP Tracker.

Another week of solid performance of the Japanese yen saw USD/JPY add to the previous weekly pullback and challenge the 155.00 support. The key Reuters Tankan Index is due on December 8, alongside Average Cash Earnings, Current Account results, the final Q3 GDP Growth Rate, and the Eco Watchers survey. On December 9 will come Machinery Tool Orders, while Producer Prices are expected on December 10. The BSI Large Manufacturing gauge will be released on December 11 along with the weekly Foreign Bond Investment prints. Industrial Production and Capacity Utilisation figures will wrap up the docket on December 12.

AUD/USD climbed to new three-month highs north of 0.6600 the figure, flirting at the same time with its 200-week SMA and adding to the sharp recovery seen in the last couple of weeks. The RBA interest rate decision takes centre stage on December 9, followed by the NAB Business Confidence index and the final prints of Building Permits and Private House Approvals. On December 11 will come the critical labour market report for the month of November.

Anticipating economic perspectives: Voices on the horizon

• The ECB’s Lagarde speaks on December 10, followed by the SNB’s Schlegel, the BoC’s Macklem and the Fed’s Powell.
• The BoE’s Bailey will speak on December 11.
• The Fed’s Goolsbee speaks on December 12.

Central banks: Upcoming meetings/releases to shape monetary policies

• The RBA will meet on December 9 (3.60% act vs. 3.60% exp).
• The BoC will decide on rates on December 10 (2.25% at vs. 2.25% exp) along with the Fed (3.75%-4.00% act vs. 3.50%-3.75% exp).
• The SNB meets on December 11 (0.00% act vs. 0.00% exp), alongside the CBRT (39.50% act vs. 37.25% exp).