Europe Summary and Highlights 23 December

European trading has seen the focus remain on the JPY after Asia’s rally on repeated threats from Japanese officials over FX intervention.  Traders are watching whether a clean break is seen of 156.00 on USD/JPY, which could open up a test of 155.00 and 154.45 after Christmas.  The market is now waiting for the U.S. Q3 GDP data, where a reasonable breakdown is expected.  EUR/USD and other European majors are lagging the USD/JPY move, but still benefitting marginally.

GBP firmed again against the EUR, as the technical bounce continued and traders talk about only one BOE rate cut in 2026.  Charts suggest scope to 0.8670.  No signs of reaction to reports suggesting that some of the Labour government cabinet support a UK return to the EU customs union to boost growth.