Tomorrow at 09:00 (GMT+2), Germany will publish import price data. Forecasts suggest that the monthly index for November may slow from 0.2% to 0.1%. Meanwhile, at 10:00 (GMT+2), Spain will release third-quarter GDP figures. The economy is expected to slow from 0.8% to 0.6% quarter-on-quarter and from 3.1% to 2.8% year-on-year, a dynamic unlikely to exert significant pressure on the European Central Bank (ECB) regarding further monetary easing. Last week, the ECB kept its key interest rate unchanged at 2.15%.

At the same time, the ECB revised most of its forecasts upward following the meeting. Economic growth is now expected at 1.4% this year, slowing to 1.2% in 2026 before accelerating back to 1.4% in 2027. Inflation is projected at 2.1%, 1.9%, and 1.8% respectively, while core inflation excluding energy and food prices is forecast at 2.4% in 2025 and 2.2% in 2026.

These improved preliminary estimates provided limited support to the euro, although downside risks remain elevated. Meanwhile, the US dollar continues to face pressure following the December Federal Reserve meeting, where interest rates were cut by 25 basis points to 3.75%, in line with expectations, and the outlook for future policy easing was left unchanged. At the same time, GDP growth forecasts were revised upward amid improving global prospects, while inflation is expected to ease further over the coming years, potentially supporting a more accommodative policy stance.

GBP/USD

The British pound is gaining ground against the US dollar, recovering from mixed trading seen in the second half of last week. The pair is testing the 1.3400 level to the upside as market participants assess revised UK GDP data for the third quarter, which confirmed growth at 0.1% quarter-on-quarter and 1.3% year-on-year.

At its December meeting, the Bank of England lowered the interest rate by 25 basis points to 3.75%. Five members of the Monetary Policy Committee supported the decision, while four voted to keep rates unchanged. Governor Andrew Bailey was the only policymaker to shift his stance from November, making the rate cut possible. Inflation in the UK, although easing, remains well above the regulator’s 2.0% target, with annual CPI slowing to 3.2% in November. Officials expect disinflation to accelerate, partly supported by the recently approved fiscal budget, which includes higher taxes alongside reduced social spending.

The US dollar remains under pressure following the Federal Reserve’s December decision, while another key factor for the currency is the expected leadership change at the Fed in 2026. One of the leading candidates is White House economic adviser Kevin Hassett, a supporter of President Donald Trump’s economic policies.

NZD/USD

The New Zealand dollar is strengthening against the US dollar, trading near 0.5768 and recovering from last week’s corrective decline, which ended with fresh local lows recorded on December 3.

Support for the US dollar late last week came from the University of Michigan’s inflation expectations data, with one-year expectations revised up from 4.1% to 4.2%, while five-year expectations remained unchanged at 3.2%. This slightly undermined confidence in further near-term easing by the Federal Reserve and contrasted with November CPI data, which showed core inflation slowing from 3.0% to 2.6% and headline inflation easing from 3.0% to 2.7% against expectations of 3.1%.

On Friday, investors also focused on the University of Michigan’s consumer sentiment data, which showed the expectations index falling from 55.0 to 54.6 points and overall consumer confidence declining from 53.3 to 52.9, below forecasts of 53.4.

The New Zealand dollar also received support from ANZ Bank data released on Friday, which showed the consumer confidence index rising from 98.4 to 101.5 points, while the business outlook index improved from 67.1 to 73.6.

Investors additionally paid attention to November trade data. Exports rose from NZD 6.44 billion to NZD 6.99 billion, while imports slowed from NZD 8.03 billion to NZD 7.15 billion. As a result, the trade deficit narrowed from NZD –2.35 billion to NZD –2.06 billion. The NZD/USD pair is also supported by the relatively hawkish stance of the Reserve Bank of New Zealand (RBNZ). Governor Anna Breman previously signaled that the regulator does not currently consider further policy adjustments. At its N

USD/JPY

The US dollar is losing ground against the Japanese yen, trading near 157.43 and retreating from local highs seen on November 20, which were renewed late last week following the release of University of Michigan data.

Updated forecasts indicate that US inflation in 2026 is expected to rise to 4.2%, up from the previous estimate of 4.1%, while five-year expectations remain unchanged at 3.2%. This broadly aligns with the Federal Reserve’s outlook, which assumes only one rate adjustment next year. Markets, however, are pricing in at least two 25-basis-point cuts.

Investor attention last Friday was also focused on the Bank of Japan’s policy meeting, where the central bank raised interest rates by 25 basis points to 0.75% and signaled readiness for further tightening. In its statement, the BoJ said it expects the national economy to continue expanding at a moderate pace, revising its earlier concerns about potential stagnation driven by external factors, particularly higher US import tariffs. Inflation forecasts were also updated, with CPI expected to stabilize at the 2.0% target in the second half of fiscal 2027.

BoJ Governor Kazuo Ueda avoided commenting on potential tensions between Prime Minister Sanae Takaichi’s economic policy stance and the central bank’s position. Takaichi is known for her dovish rhetoric and recently approved an additional budget featuring a sharp increase in government spending. On Friday, markets also assessed Japan’s November inflation data, which showed core CPI easing from 3.1% to 3.0% and headline inflation slowing from 3.0% to 2.9%. Ovember meeting, the RBNZ cut interest rates by 25 basis points to 2.25%.

XAU/USD

The XAU/USD pair is gaining ground, holding near fresh record highs around 4,400.0, while awaiting new catalysts. However, most investors are expected to step back this week as Christmas holidays approach. Today at 15:30 (GMT+2), the US will release the Chicago Fed National Activity Index for September, published with a delay due to the recent record government shutdown.

At the same time, forex traders continue to discuss the likelihood of further monetary easing by the Federal Reserve next year. As expected, the Fed cut interest rates by 25 basis points in December to 3.75% and left its policy outlook unchanged, projecting only one additional 25-basis-point cut in 2026. Market participants, however, continue to expect at least two rate reductions under current economic conditions.

University of Michigan data released on Friday adjusted bearish sentiment toward the US dollar. One-year inflation expectations were revised up from 4.1% to 4.2%, while five-year expectations remained unchanged at 3.2%. At the same time, data published on Thursday showed US CPI slowing in November from 3.0% to 2.7% year-on-year, below the forecast of 3.1%, while core inflation eased from 3.0% to 2.6%.

Gold continues to receive support from geopolitical risks. The Russia–Ukraine conflict remains in an active phase despite nearly a month of relatively intensive negotiations involving representatives from the US, the EU, Ukraine, and Russia. In addition, investors are monitoring developments around Venezuela. Last week, US President Donald Trump designated the Venezuelan government a “terrorist organization” and announced a full maritime blockade of oil tankers traveling to or from Venezuela. Reports also emerged that US vessels are tracking another ship in the region, Bella 1, the third such case in recent days. While experts do not rule out targeted ground operations or airstrikes, the White House appears reluctant to escalate the situation further.