Currency market dynamics have not shifted meaningfully as the session progresses, with the day’s relative performance table largely intact. Aussie remains firmly at the top, supported by the RBA’s hawkish hold earlier today. Governor Michele Bullock effectively shut the door on further easing and made clear that the next move could be a hike if some of recent inflation drivers prove more persistent than expected. Kiwi continues to follow as the second-strongest currency, underpinned by spillover from Aussie’s strength while Loonie ranks third.
At the other end of the spectrum, Yen is still the weakest performer, facing renewed selling pressure even after comments from BoJ Governor Kazuo Ueda. Euro sits as the second-softest, while Dollar is the third weakest amid positioning ahead of tomorrow’s FOMC outcome. Sterling and Swiss Franc are holding in the middle of the pack.
The configuration reflects a mild risk-on undertone, though this is not yet translating into directional trades. With FOMC event risk looming, markets appear reluctant to commit. Speculation of a “hawkish cut” has grown, with some investors preparing for the possibility that the Fed signals a lengthy pause after tomorrow’s widely expected 25bps reduction.
One noteworthy development comes from U.S. trade policy. In a Politico interview, President Donald Trump suggested he could make further adjustments to tariffs to ease consumer prices, saying he had already done so in certain categories. “Prices are all coming down,” he said. “Everything is coming down.”
Meanwhile, Ueda told the Financial Times that Japan’s economy has weathered the impact of U.S. tariffs better than many expected. He noted that the “real side of the economy is doing OK,” with underlying inflation “continuing to rise” toward the BoJ’s 2% target.
So far, Ueda said, U.S. corporates have absorbed much of the tariff burden instead of passing costs aggressively to consumers. At the same time, Japanese car exporters have cut prices to absorb their share of tariff costs, helping stabilize auto export volumes and preventing job losses.
In Europe, at the time of writing, FTSE is down -0.09%. DAX is up 0.32%, CAC is down -0.54%. UK 10-year yield is down -0.011 at 4.517. Germany 10-year yield is down -0.006 at 2.856. Earlier in Asia, Nikkei rose 0.14%. Hong Kong HSI fell -1.29%. China Shanghai SSE fell -0.37%. Singapore Strait Times rose 0.14%. Japan 10-year JGB yield fell -0.008 to 1.965.
Silver eyes clean break above 60 as shallow pullback indicates underlying strength
Silver’s advance paused below the key projection near 60 psychological level, yet the pullback since has been modest, signaling no damage to the broader uptrend. The metal’s consolidation appears tied to caution ahead of the FOMC decision, with traders weighing talk of a “hawkish cut” and the possibility that the Fed may signal a longer pause after tomorrow’s move. Once the policy risk is cleared, Silver is expected to resume its uptrend.
Fundamentally, the backdrop remains supportive. ETF demand continues to surge, with total holdings rising by close to 590 metric tonnes last week. Inflows have increased in nine of the last eleven months, reflecting a sustained shift toward precious-metal exposure amid global uncertainty. November’s inflow of 15.7 million ounces—the strongest since July—further highlights steady investor engagement.
This pattern of strong ETF accumulation is expected to persist in the coming months. Safe-haven interest is being reinforced by geopolitical risks, while industrial consumption and supply-side tightness continue to bolster the structural case for higher prices.
Technically, outlook remains firmly bullish while 54.36 resistance turned support stays intact. The shallow nature of the recent retreat suggests consolidation rather than exhaustion, and price action remains well-positioned for a clean break above the 60 psychological level on next move. Decisive break of 61.8% projection of 36.93 to 54.44 from 48.60 at 59.42 could prompt upside acceleration got 100% projection at 100% projection at 66.11.
RBA holds at 3.60% as Bullock signals no cuts, open to 2026 hike
RBA kept the cash rate unchanged at 3.60% today, as markets had fully priced. But the tone from Governor Michele Bullock was firmer than expected, pushing back against speculation of early-2026 easing. “Given what’s happening with underlying momentum in the economy … it does look like additional cuts are not needed,” she said, adding that she does not see rate cuts “on the horizon for the foreseeable future.”
While Bullock confirmed the board did not discuss a rate hike as an active policy option today, she stressed members spent “quite a lot” of time examining what conditions might force them to lift rates next year. The discussion centered on the persistence of inflation and how much further the economy needs to cool before the board can be confident price pressures are returning to target.
Asked whether a February rate increase is plausible, Bullock did not rule it out. She said the RBA will monitor whether inflation remains sticky: if inflation fails to move back toward target, “then I think that does raise questions about how tight financial conditions are and the board might have to consider whether or not it’s appropriate to keep interest rates where they are or in fact at some point raise them.” Any decision, she added, will be made “meeting by meeting.”
The accompanying statement echoed this mildly hawkish stance, noting that recent data show inflation risks have “tilted to the upside.” Although the board judges part of the recent lift in underlying inflation as driven by temporary factors, policymakers admit uncertainty about the new monthly CPI series and acknowledge signs of a “more broadly based pick-up” in price pressures that may prove persistent.
Labor market indicators continue to suggest conditions remain “a little tight.” While the Wage Price Index has eased from its peak, broader wage measures are still running strong, and unit labor costs remain high.
For now, the RBA is signaling a steady policy stance, but the barrier to easing has grown significantly while the door to a potential hike in 2026 is now visibly open.
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 155.22; (P) 155.61; (R1) 156.31; More…
Intraday bias in USD/JPY stays mildly on the upside at this point. Corrective pullback from 157.88 could have completed at 154.33 already. Further rise should be seen to 157.88 and above. Firm break of 158.85 structural resistance will be a strong bullish sign, and should target a retest on 161.94 high next. For now, risk will stays mildly on the upside as long as 154.33 support holds, in case of retreat.
In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.
