This Week: GBPUSD, EURUSD, USDJPY and US NFP in focus

• BoE may cut rates, GBP reaction hinges on tone
• ECB likely on hold, EUR waits for clear signal
• BoJ hike expected, could strengthen the Yen
• US jobs data may shake FX markets sharply
• Big week: rates + data drive major FX pairs

For GBPUSD, the Bank of England faces a difficult decision this week, with markets pricing a cut to 3.75% despite sticky inflation, creating a tense trade-off between growth and price stability.

For EURUSD, the ECB is expected to hold rates at 2.15%, pausing to assess previous easing as growth stalls but inflation aligns with targets.

For USDJPY, the Bank of Japan remains the outlier, with strong consensus for a hike to 0.75% to narrow the yield gap. US NFP reading may be adding volatility in addition to the central banks’ decisions with markets expecting +50K for October.

Events Watchlist:

Tuesday, Dec 16: US Non-Farm Payrolls – EURUSD

Markets brace for a soft print following weak private sector numbers. A result below the 50k consensus would validate recent Fed easing and potentially weigh on the dollar, while an upside surprise could signal labor resilience, sparking a USD rally.

Thursday, Dec 18: BoE Interest Rate Decision – GBPUSD

A 25bps cut to 3.75% is largely priced in. The reaction depends on guidance: a "dovish cut" highlighting weak growth could pressure Sterling, whereas a "hawkish cut" emphasizing inflation risks may help GBP hold its ground.

Thursday, Dec 18: ECB Interest Rate Decision – EURUSD

The ECB is widely expected to maintain the 2.15% rate. A firm "hold" prioritizing data-dependence could support the Euro, while any dovish signal could trigger selling.

Friday, Dec 19: BoJ Interest Rate Decision – USDJPY

Expectations are high for a rate hike to 0.75%. A hike could boost the Yen and drive USDJPY lower, while a surprise hold could cause a sharp unwinding of bullish Yen bets

Other major events this week:

Monday, Dec 15

• JPY: Tankan Large Manufacturing Index (Q4)
• CNY: China Industrial Production (Nov); Retail Sales (Nov); Fixed Asset Investment (Nov); Foreign Direct Investment (Nov)
• EUR: Germany Wholesale Prices (Nov); Eurozone Industrial Production (Oct)
• CAD: Canada Inflation Rate (Nov)

Tuesday, Dec 16

• AUD: Westpac Consumer Confidence Change (Dec)
• JPY: Japan S&P Global manufacturing and Services PMIs (Dec)
• GBP: UK Unemployment Rate (Oct); S&P Global Manufacturing and Services PMIs (Dec)
• EUR: Germany Composite, Manufacturing and Services PMIs (Dec); ZEW Economic Sentiment Index (Dec)
• USD: US NFP (Oct & Nov); Retail Sales (Oct); Unemployment Rate (Nov)

Wednesday, Dec 17

• NZD: New Zealand Current Account (Q3)
• JPY: Japan Balance of Trade (Nov); Machinery Orders (Oct)
• UK100: UK Inflation Rate (Nov)
• EUR: Germany Ifo Business Climate (Dec)
• US500: US Retail Sales (Nov); Business Inventories (MoM); Fed Williams and Bostic Speeches
• WTI: API Crude Oil Stock Change (w/e Dec 12)

Thursday, Dec 18

• NZD: New Zealand GDP (Q3)
• CHF: Swiss Balance of Trade (Nov)
• FRA40: France Business Confidence (Dec)
• GBP: BoE Interest Rate Decision & MPC Meeting Minutes
• EUR: ECB Interest Rate Decision
• USD: US Inflation Rate (Nov); Initial Jobless Claims (w/e Dec 13)
• MXN: Mexico Interest Rate Decision

Friday, Dec 19

• NZD: New Zealand Balance of Trade (Oct); Business Confidence (Dec)
• JPY: BoJ Interest Rate Decision; Inflation Rate (Nov)
• UK100: UK Retail Sales (Nov); GfK Consumer Confidence (Dec)
• EUR: Germany GfK Consumer Confidence (Jan); Germany PPI (Nov); Eurozone Consumer Confidence Dec)
• CHF: Swiss Current Account (Q3)
• CAD: Canada Retail Sales (Nov)
• USD: US Existing Home Sales (Nov); Michigan Consumer Sentiment Final (Dec)

Saturday, Dec 20

• CNY: China Loan Prime Rate 1Y & 5Y (Dec)