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Year-End Trading Turns Cautious
Global markets opened the final trading days of the year on a cautious note, with investors reluctant to take bold positions amid thin holiday liquidity. Attention remains firmly fixed on the upcoming release of the Federal Reserve’s December meeting minutes, widely seen as the last major policy signal before markets transition into 2026.
Dollar Finds Its Footing
The US dollar showed signs of stabilization, extending modest gains for a third straight session. Following last month’s quarter-point interest rate cut, traders continue to reassess expectations for further easing next year. While rate cuts remain part of the broader outlook, fading expectations of an immediate move have helped keep the dollar supported.
Fed Minutes Take Center Stage
Market focus has shifted decisively toward the Federal Open Market Committee minutes, which are expected to offer deeper insight into internal policy discussions. Investors are looking for clues on how officials view inflation risks, growth momentum, and the appropriate pace of future rate adjustments.
Gold Retreats After Record Rally
Gold prices fell sharply as profit-taking intensified after last week’s historic highs. The pullback was amplified by reduced year-end liquidity, marking a corrective phase following months of strong gains driven by safe-haven demand and rate-cut expectations.
Sterling Treads Carefully
The British pound traded in a narrow range as investors remained wary of committing fresh positions. Inflation remains elevated despite recent easing, limiting policy flexibility and keeping the currency’s upside in check as the year draws to a close.
Euro Holds Ground Amid Global Tensions
The euro moved sideways for a third consecutive session, restrained by a firmer dollar and heightened geopolitical uncertainty. Demand for safety outweighed appetite for risk, preventing a clear directional move.
Yen Pressured by Policy Caution
The Japanese yen weakened modestly as central bank signals highlighted a cautious approach toward policy normalization. While rates remain far from neutral, concerns about economic and market stability continue to temper expectations for aggressive action.
Markets Look Ahead to 2026
With liquidity thinning and key signals still pending, markets appear content to end the year in preservation mode. The Fed minutes may not spark immediate volatility, but they are likely to influence sentiment as investors prepare for the first trading sessions of the new year.
