Markets are increasingly pricing in further Fed rate cuts in early 2026 — after an expected December move that could bring policy rates closer to 3.00Markets are increasingly pricing in further Fed rate cuts in early 2026 — after an expected December move that could bring policy rates closer to 3.00

Interest Rate Expectations and Their Impact on Q1 2026 FX Trends

Author: Medium

Source: Medium

2025/12/06 00:29

1 min read

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Markets are increasingly pricing in further Fed rate cuts in early 2026 — after an expected December move that could bring policy rates closer to 3.00–3.25%. By contrast, the ECB looks set to keep rates stable near 2.00% as euro-area inflation eases.

💱 What could this mean for FX?

• Pressure on the US dollar may persist
• EUR/USD has scope to push higher if expectations hold
• Some emerging currencies may benefit from a softer dollar

⚡ Q1 could bring stronger volatility and new directional trends as traders reposition around policy shifts.

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Interest Rate Expectations and Their Impact on Q1 2026 FX Trends 🌍📈 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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