{"id":36210,"date":"2025-12-08T12:53:45","date_gmt":"2025-12-08T04:53:45","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=36210"},"modified":"2025-12-08T12:53:45","modified_gmt":"2025-12-08T04:53:45","slug":"week-ahead-us-rate-cut-in-focus","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/week_ahead\/week-ahead-us-rate-cut-in-focus\/","title":{"rendered":"Week Ahead: US Rate Cut in Focus"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/Image_fx-43-1024x576.jpg\" alt=\"\" class=\"wp-image-36218\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fed decision and Powell\u2019s guidance will drive the week.<\/li>\n\n\n\n<li>Traders should watch BOJ commentary as yen carry-trade risk grows.<\/li>\n\n\n\n<li>Key releases: JOLTS, Federal Funds Rate, UK GDP.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The calm on the charts masks a brewing risk. If BOJ policymakers signal even a small shift in tone, the yen carry trade that has fuelled global markets could unwind with force.<\/p>\n\n\n\n<p>The blackout period prevents Fed members from managing expectations, leaving the market with one clear assumption: the Fed is easing. While the projected 3.75 percent rate is already priced, the Summary of Economic Projections and Powell\u2019s tone will determine how far markets extend the easing narrative into 2026.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Wall St Week Ahead: Fed&#39;s internal split puts spotlight on Powell&#39;s rate guidance, dissents <a href=\"https:\/\/t.co\/sggqAcbhLD\">https:\/\/t.co\/sggqAcbhLD<\/a> <a href=\"https:\/\/t.co\/sggqAcbhLD\">https:\/\/t.co\/sggqAcbhLD<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1997731615703715867?ref_src=twsrc%5Etfw\">December 7, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The dot plot will be crucial. Tradersneed confirmation that the Fed aligns with the aggressive path already priced by the market. Any hesitation could force repricing across currencies and risk assets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">QT Ends and Liquidity Turns<\/h2>\n\n\n\n<p>The termination of QT marks the return of supportive liquidity conditions.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The US banking system\u2019s reserves, a key factor in the Fed&#39;s decision to keep shrinking its balance sheet, sank below $3 trillion once again, just as Chair Jerome Powell signaled quantitative tightening could stop in the coming months <a href=\"https:\/\/t.co\/AfRRfCGASG\">https:\/\/t.co\/AfRRfCGASG<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1978932631778587032?ref_src=twsrc%5Etfw\">October 16, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The Fed\u2019s 13.5 billion dollar repo injection, the second largest since the pandemic, signals stress in the financial system. History shows that once QT ends under strain, QE often follows. While consensus expects a formal QE return in 2026, the path may depend on leadership changes as Powell\u2019s term ends in May 2026.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Jerome Powell is expected to push through another quarter-point rate cut this week despite growing unease among fellow Fed policymakers that inflation remains too high <a href=\"https:\/\/t.co\/0OjGHlmPaz\">https:\/\/t.co\/0OjGHlmPaz<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1997414864063549897?ref_src=twsrc%5Etfw\">December 6, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Prediction markets place Kevin Hassett as the leading candidate for the next Fed chair with a 74 percent probability. If nominated early, the market may begin trading on the stance of the incoming chair rather than Powell\u2019s guidance. This dynamic could accelerate expectations of earlier and deeper easing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Central Bank Highlights: BOJ, RBA, and BOC<\/h2>\n\n\n\n<p>While US policy is shifting toward accommodation, several overseas central banks add layers of uncertainty to market stability \u2014 with the BOJ remaining the key risk, alongside important signals from the Australia&#8217;s RBA and Canada&#8217;s BOC this week.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Speculation is growing that the Bank of Japan is on track to raise interest rates this month but market participants are still betting that the yen will weaken against the dollar <a href=\"https:\/\/t.co\/FkvZUUUKt3\">https:\/\/t.co\/FkvZUUUKt3<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1997790797618389023?ref_src=twsrc%5Etfw\">December 7, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>If the BOJ raises rates from 0.5 percent to 0.75 percent on 19 December, the narrowing spread between Japan and the United States would make yen-funded carry trades more expensive to unwind.<\/p>\n\n\n\n<p>That could force investors to sell US assets to settle yen liabilities, creating the conditions for a fast, disorderly correction.<\/p>\n\n\n\n<p>This risk mirrors the volatility episodes of past carry-trade squeezes.<\/p>\n\n\n\n<p>A BOJ-driven shock, however, would likely push the Fed toward even deeper easing or an earlier reactivation of QE to stabilise liquidity. Short-term pressure would therefore contrast with a potentially bullish longer-term tailwind for risk assets.<\/p>\n\n\n\n<p>Beyond Japan, traders should also watch the RBA&#8217;s policy tone and BOC&#8217;s overnight rate, both of which may influence cross-asset sentiment, especially if they reinforce or contradict the global easing narrative.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Key Symbols to Watch<\/h2>\n\n\n\n<p><strong><a href=\"http:\/\/www.vtmarkets.com\/indices\" target=\"_blank\" rel=\"noopener\" title=\"\">USDX<\/a> |<a href=\"http:\/\/www.vtmarkets.com\/forex\" title=\"\"> USDJPY<\/a> | EURUSD | <a href=\"http:\/\/www.vtmarkets.com\/precious-metals\" target=\"_blank\" rel=\"noopener\" title=\"\">XAUUSD<\/a> | SP500 | BTCUSD<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Upcoming Events<\/h2>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><tbody><tr><td>Date<\/td><td>Currency<\/td><td>Event<\/td><td>Forecast<\/td><td>Previous<\/td><td>Analyst Remarks<\/td><\/tr><tr><td>Tue 09 Dec<\/td><td>JPY<\/td><td>BOJ Gov Ueda Speaks<\/td><td>\u2013<\/td><td>\u2013<\/td><td>If BOJ signals continuous hiking or a rate increase beyond expectations, USDJPY could trade lower.<\/td><\/tr><tr><td>Tue 09 Dec<\/td><td>USD<\/td><td>JOLTS Job Openings<\/td><td>7.14M<\/td><td>\u2013<\/td><td>A weak reading could spur the Fed to act beyond December and weaken USD.<\/td><\/tr><tr><td>Thu 11 Dec<\/td><td>USD<\/td><td>Federal Funds Rate<\/td><td>3.75%<\/td><td>4.00%<\/td><td>Market has priced in the cut. Powell\u2019s statement will likely move markets.<\/td><\/tr><tr><td>Fri 12 Dec<\/td><td>GBP<\/td><td>GDP m\/m<\/td><td>0.10%<\/td><td>-0.10%<\/td><td>A rebound from negative growth. Refer to structure.<\/td><\/tr><tr><td>Tue 16 Dec<\/td><td>USD<\/td><td>Non Farm Employment Change &amp; Unemployment Rate<\/td><td>\u2013<\/td><td>\u2013<\/td><td>A key gauge of labour strength. A soft print may accelerate expectations for further Fed cuts.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For full view of upcoming economic events, check out VT Markets&#8217; <a href=\"https:\/\/www.vtmarkets.com\/economic-calendar\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Economic Calendar<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Key Movements of the Week<\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">USDX<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"546\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-6-1024x546.png\" alt=\"\" class=\"wp-image-36217\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USDX trades around the 99.10 monitored area where bearish price action is expected.<\/li>\n\n\n\n<li>If price moves higher, traders should watch 99.40 for renewed bearish structure.<\/li>\n\n\n\n<li>Downside continuation opens interest at 98.50.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">EURUSD<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"545\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-5-1024x545.png\" alt=\"\" class=\"wp-image-36216\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A move lower into 1.1605 offers a zone to watch for bullish reactions.<\/li>\n\n\n\n<li>Upside structure may encounter resistance at 1.1710.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">GBPUSD<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"547\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-4-1024x547.png\" alt=\"\" class=\"wp-image-36215\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>GBPUSD rejected the 1.3405 monitored area.<\/li>\n\n\n\n<li>Continued consolidation lower may target 1.3250 for bullish price action.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">USDJPY<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"546\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-3-1024x546.png\" alt=\"\" class=\"wp-image-36214\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USDJPY has traded above the descending trendline.<\/li>\n\n\n\n<li>If price moves higher, traders should monitor 156.00 for a potential bearish reaction.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">Gold (XAUUSD)<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/1_image-2-1024x547.png\" alt=\"\" class=\"wp-image-36213\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold moved higher before reversing lower.<\/li>\n\n\n\n<li>Key level remains 4175 for near-term reactions.<\/li>\n\n\n\n<li>If consolidation deepens, the next bullish zone sits near 4070.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">SP500<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"544\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-1-1024x544.png\" alt=\"\" class=\"wp-image-36212\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>SP500 broke above the 6888 swing high.<\/li>\n\n\n\n<li>Traders should monitor how price behaves within the ascending channel.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">Bitcoin (BTCUSD)<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"545\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-1024x545.png\" alt=\"\" class=\"wp-image-36211\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Bitcoin turned lower after breaching the 93156 swing high.<\/li>\n\n\n\n<li>If consolidation continues, upside structure is monitored once price retakes 90277.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Bottom Line<\/h2>\n\n\n\n<p>The week ahead sits at the crossroads of shifting US policy and rising overseas risk. The expected Fed cut, paired with the end of QT, returns liquidity to the centre of market behaviour, while the BOJ\u2019s next move could unsettle positions built on years of cheap yen funding.<\/p>\n\n\n\n<p>Trading conditions may tighten or open up quickly as these forces collide.<\/p>\n\n\n\n<p>With that in mind, the focus turns to the Fed\u2019s message, the signals from the plumbing of the financial system, and how price reacts around the major zones mapped across USD pairs, indices, commodities, and crypto.<\/p>\n\n\n\n<p><strong>Create a <a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets accoun<\/a>t today and receive our weekly newsletter and more insights on our platform.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>US Fed expected to deliver a 25 bps cut this week, driving volatility across FX, commodities, and equity markets. \u2013 vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":36218,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[33],"tags":[32],"class_list":["post-36210","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-week_ahead","tag-analysis"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/36210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=36210"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/36210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/36218"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=36210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=36210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=36210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}