In its December meeting, the Federal Reserve reduced interest rates by 0.25% and adjusted its rate-cutting outlook for 2025, concluding that rates would only be cut twice instead of the previously anticipated four times.

The U.S. Dollar Index, which measures the value of the USD against six major currencies, weakened slightly due to lower government bond yields. Meanwhile, yields on 2-year and 10-year Treasury notes stood at 4.33% and 4.58%, respectively.

The British Pound depreciated against major currencies as investors anticipated a more dovish monetary policy stance from the BoE next year, following the decision to hold the interest rate steady at 4.5% in the latest meeting. However, three policymakers advocated for a rate cut.

Source: Fxstreet