The markets have once again experienced volatility during the European trading session on Friday (December 12, 2025). The driving factors remain unchanged, as traders are still considering the potential for a more dovish stance from the Federal Reserve (the Fed), with the likelihood of interest rate cuts more than once in 2026.
This outlook emerged after the Fed officially reduced interest rates by 25 basis points (bps) to a range of 3.5%–3.75%, along with the announcement of a quantitative easing (QE) program through the purchase of $40 billion in bonds, which continues to be a primary factor shaping global market sentiment.
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The combination of loose monetary policy and expectations of further easing is expected to continue influencing market movements throughout the European trading session and into the U.S. session.
VÀNG
The price of Gold (XAUUSD) saw a significant increase of $38.49 or 384.9 pips, reaching $4,317.68 per troy ounce during the European trading session, marking the highest level in the past month.
This uptick was driven by positive sentiment from the Fed’s interest rate cut and the implementation of the QE program, which historically tends to catalyze strength in safe-haven assets. Additionally, growing speculation that the Fed could adopt a more aggressive rate-cutting policy next year has provided further support for Gold prices.
Given this sentiment, Gold still has the potential to continue its upward trend in tonight’s trading, although volatility should still be anticipated.
DẦU
The price of Oil (CLS10) fell by $0.29 to $57.61 per barrel during the European trading session after attempting a rebound in the morning.
The price pressure comes from increasing optimism surrounding peace negotiations between Russia and Ukraine, which could reopen Russian oil supplies to the global market. This has rekindled concerns about oversupply, although the International Energy Agency (IEA) has revised its global supply projections downward, and OPEC has indicated a relatively balanced market condition for the next year.
The sentiment of oversupply concerns may continue to exert downward pressure on Oil prices during the U.S. trading session.
EURUSD
The EURUSD pair corrected by 120 points or 12 pips to 1.17267 during the European trading session. This correction was triggered by profit-taking after a sharp two-day rally and a rebound effort by the U.S. dollar.
Nonetheless, from a fundamental perspective, the U.S. dollar remains under pressure due to QE policies, the Fed’s interest rate cuts, and market views increasingly leaning towards a dovish stance from the U.S. central bank next year.
Under these conditions, EURUSD still has the potential to strengthen further as pressure on the U.S. dollar persists.
GBPUSD
The GBPUSD pair traded in a volatile range between 1.33730 and 1.33996 throughout the European session. The actual data for the UK’s economic growth (GDP) in October came in at -0.1%, worse than the expected 0%, indicating a deeper economic slowdown than anticipated.
This situation has heightened speculation that the Bank of England (BoE) may opt for a rate cut next week, creating negative sentiment for the British pound.
This pressure may continue and limit GBPUSD’s movements during the U.S. trading session.
USDJPY
The USDJPY pair rose by 406 points or 40.6 pips to 155.907 during the European session, bolstered by a rebound in the U.S. dollar.
However, fundamentally, this currency pair still faces pressure from the increasing likelihood that the Bank of Japan (BoJ) may raise interest rates soon, in line with inflation in Japan nearing target levels. On the other hand, the U.S. dollar remains under negative sentiment from QE policies and the prospect of continued monetary easing from the Fed.
With this combination of sentiments, USDJPY may still be vulnerable to downward pressure in tonight’s trading.
NASDAQ
The Nasdaq index dropped 272 points to 25,561 during the European trading session. This sell-off was prompted by rising concerns over a potential artificial intelligence (AI) bubble following Oracle’s quarterly earnings, which fell below Wall Street’s estimates.
This situation triggered a sell-off in AI-related stocks, followed by a rotation of funds into cyclical stocks that are more sensitive to economic improvement.
This negative sentiment is expected to weigh on the Nasdaq’s movement during the U.S. trading session.
