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How did the rate cut impact gold and currencies?

Impact of the New Policy on Markets and Risk Appetite

Weekly Global Markets Report Global markets experienced a week of anticipation followed by a clear shift in direction, driven by the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points — a move that marked a pivotal turning point in investor sentiment and the performance of major asset classes.

The key highlights of the week were as follows:

1. The U.S. Dollar – Beginning of a New Weakness Cycle

The dollar started the week with sideways movement, but the rate cut on December 10 led to a noticeable decline in the currency against most major counterparts.
Markets repriced the monetary policy path, with expectations shifting toward further easing in the first half of 2026, adding more pressure on the dollar.

2. Gold – Strong Rally and New Weekly Highs

Gold was the biggest winner this week:

• It began the week near the 4180 support zone.
• Broke above 4230, 4248, and 4265 as highlighted in earlier analyses.
• Ended the week near 4323, its highest level in weeks.

Main drivers:
– Falling real yields
– Dollar weakness
– Expectations of continued monetary easing
– Strong safe-haven inflows

Technical momentum remained positive throughout the week with no signs of reversal.

3. Major Currencies – Broad Gains from Dollar Weakness

EURUSD – Euro/USD

Moved within a rising channel and continued its gradual climb supported by the weaker dollar.
Ended the week near key resistance levels.

GBPUSD – British Pound/USD

Maintained steady gains within a clear ascending channel, supported by improved risk appetite.
Holding above 1.3270 reinforced the bullish outlook all week.

USDJPY – Dollar/Yen

Despite yen strength after the rate decision, the pair remained elevated near 156.60, with a slight downward bias due to dollar weakness.

4. Oil – Limited Movement with a Slight Bullish Tilt

Crude oil traded within the 58.00–59.50 range, showing slight improvement after the rate cut.
Support came from improved risk appetite and dollar weakness, but global demand concerns capped any strong upside.

5. U.S. Indices – Moderate Gains

U.S. indices posted positive performances following the rate cut:

NASDAQ

Climbed toward the 25,600–25,800 zone, supported by expectations of lower borrowing costs in 2026.

Dow Jones

Recorded moderate gains, consolidating around 47,600–47,800.

Overall picture:
Investors began pricing in an extended easing cycle, boosting technology stocks and sectors that are sensitive to interest rates.

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