The ING EUR/GBP market commentary was updated on December 1 after being published following the UK Budget announcement. The article was outdated at the time and should not have been released. The FXStreet Insights Team is made up of journalists who gather market observations from experts and insights from various analysts. The articles cover various topics, including Canada’s employment data, changes in commodities like copper, and currency movements among G10 pairs.

Current Discussions and Market Trends

Right now, the main focus is on the EUR/USD, which has reached three-week highs around 1.1650. This is due to expectations of a potential Fed rate cut. On the other hand, GBP/USD has risen to multi-week highs near 1.3270, driven by a weaker US Dollar. Gold prices have also risen to two-month highs as market sentiment leans toward another Fed rate cut. FXStreet provides market information for informational purposes only. It is essential to do thorough research before making investment decisions, as investing carries risks, including the possibility of losing money. FXStreet does not give investment advice and notes that information may not always be up-to-date or error-free. Market expectations for a Federal Reserve rate cut this month are strong, with fed funds futures indicating over an 85% likelihood of a 25-basis-point reduction. This expectation is causing the US Dollar Index (DXY) to drop towards its autumn lows, recently testing the 102.50 support level. Derivative traders might consider long positions on currencies against the dollar, anticipating this trend to continue through the end of the year. Gold has benefited significantly from the changing rate expectations, surpassing $4,260 an ounce for the first time since early October 2025. This rise is supported by falling US Treasury yields, which lower the opportunity cost of holding the non-yielding metal. There is potential for further price increases, making call options on gold futures an appealing strategy for the upcoming weeks.

Euro and Sterling Performance Analysis

The Euro is showing strong performance, pushing the EUR/USD pair toward the 1.1650 mark, mainly due to the contrasting policies of a dovish Fed and a steady ECB. The recent Eurozone inflation data from November 2025 came in stronger than expected at 2.8%, reinforcing the Euro’s strength. We expect traders will increase long positions on EUR/USD in anticipation of the upcoming US ISM data release. Although Sterling is gaining against the dollar and reaching multi-week highs near 1.3270, it lags behind the Euro. This underperformance can be attributed to lingering concerns from last month’s UK Budget, which raised questions about the fiscal outlook. This situation suggests that a long EUR/GBP options strategy may be a wise move to take advantage of relative currency strength. We should also consider the growing hawkish stance from the Bank of Japan, contrasting sharply with the Federal Reserve. Governor Ueda’s recent comments have boosted the Yen significantly, marking a notable shift from the ultra-loose policies of the past decade. This situation makes short positions on pairs like USD/JPY and GBP/JPY appealing, as traders close long-held carry trades. Create your live VT Markets account and start trading now.

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