The market focuses on the central bank's dynamics and economic data performance. The Australian dollar is under pressure due to the strengthening of the US dollar driven by PPI data, but Australian employment data provides some support; EUR/GBP rose for two consecutive days due to data from the UK and Germany, but its gains were limited by the prospect of interest rate cuts by the European Central Bank; GBP/JPY fell due to poor UK economic data, while the yen gained support due to safe haven sentiment but had limited gains.

AUD/USD fluctuates slightly, focus on Federal Reserve resolutions and technical support

On Friday, December 13th, the AUD/USD market fluctuated slightly. The potential threat of tariffs from the Trump administration has pushed the US dollar to strengthen across the board, putting resistance on the AUDUSD exchange rate.

In addition, on December 12th, the Australian dollar received some support due to the release of domestic employment data in Australia. The seasonally adjusted employment change data increased by 35600 people, bringing the total employment in November to 14.5355 million people. Meanwhile, the unemployment rate dropped to 3.9%, the lowest level since March and below market expectations of 4.2%.

The US dollar appreciated due to higher than expected US Producer Price Index (PPI) data released on December 12th. In November, the US PPI rose 0.4% month on month, the largest increase since June, after the October data was revised upwards to a 0.3% increase. This data is better than the expected 0.2%.

The Federal Reserve's interest rate decision will be the focus next week. According to the CME FedWatch tool, the market currently fully expects the Federal Reserve to cut interest rates by 25 basis points on December 18th.

In terms of technology, analyst Faruqui provided the following interpretation:

On Friday, December 13th, the AUDUSD exchange rate hovered around 0.6368. From the daily chart, the exchange rate continues to decline within the downtrend channel, showing signs of a strengthening bearish bias. On the 14th, the RSI was slightly above the 30 level, indicating that the bearish trend still exists;

The annual low of 0.6348 (previously touched on August 5th) is the current direct support level. If it successfully falls below this level, it may further strengthen bearish sentiment and push the Australian dollar/US dollar towards the 0.6190 level near the lower edge of the downward channel;

On the upward side, AUDUSD may encounter initial resistance at the 9-day moving average. The next resistance level is the 14 day moving average, which is consistent with the upper boundary of the downtrend channel. If the exchange rate clearly breaks through this channel, it may push it towards the 7-week high level of 0.6687.

Affected by key economic data from the UK and Germany, EUR/GBP rose for the second consecutive trading day

On Friday, December 13th, during the European morning session, the euro/pound exchange rate was around 0.8285, continuing two trading days of gains.

According to data released by the UK Office for National Statistics, the UK's GDP in October decreased by 0.1% month on month, lower than the expected growth of 0.1%. At the same time, industrial production decreased by 0.6% month on month, following a 0.5% decline in the previous month, while market expectations were for a growth of 0.3%. The manufacturing production in October decreased by 0.6% month on month, which is also far below the expected growth of 0.2% and the 1% decline in September.

However, due to the possibility of the Bank of England adopting a slower pace of policy easing than other central banks in Europe and North America, the pound may regain support.

The German Federal Statistical Office reported a seasonally adjusted trade surplus of 13.4 billion euros in October, lower than the expected 16.1 billion euros and 17 billion euros in September. During the same period, Germany's exports decreased by 2.8% and imports only slightly decreased by 0.1%.

On December 12th, ECB lowered the deposit convenience rate by 25 basis points to 3.0%, which is in line with market expectations. At the same time, the main refinancing operation interest rate was also lowered by 25 basis points to 3.15%. This is the third consecutive 25 basis point interest rate cut by the European Central Bank, and also the fourth interest rate cut this year.

However, the upward potential of the euro may be limited as European Central Bank President Lagarde stated that officials have discussed the possibility of a 50 basis point rate cut. Lagarde pointed out that "the risks of economic growth tend to decline" and "trade frictions with the United States may put pressure on growth".

GBP/JPY continues to decline due to poor key economic data from the UK

On Friday, December 13th, during the European trading session, the GBP/JPY exchange rate was around 193.30, continuing its downward trend. This trend was driven by lower than expected key economic data from the UK.

The UK's GDP in October fell by 0.1% month on month, failing to meet market expectations for a 0.1% growth; Industrial production decreased by 0.6% month on month, while the market expects a growth of 0.3%. But the downward pressure on the pound seems limited, as the market expects the Bank of England to be more cautious in policy easing.

The Japanese yen is supported by safe haven demand, mainly due to geopolitical tensions and market concerns about the trade situation. However, due to the widespread market belief that the Bank of Japan will not raise interest rates at next week's policy meeting, the rise of the yen has been somewhat limited.

On Friday, December 13th, the Tankan Large Manufacturing Index released by the Bank of Japan rose to 14 in the fourth quarter, reaching its highest level since March 2022.