ForexLive European FX news wrap: Pound drops, dollar steady awaiting the Fed

<p>Fed previews:</p><ul><li><a href="https://www.forexlive.com/news/welcome-to-fed-day-20231213/">Welcome to Fed day</a></li><li><a href="https://www.forexlive.com/news/fed-should-not-offer-strong-push-back-against-recent-market-pricing-citi-20231213/">Fed should not offer strong push back against recent market pricing – Citi</a></li><li><a href="https://www.forexlive.com/news/fed-wont-stir-the-pot-but-rate-cut-timeline-may-be-faster-than-ecb-commerzbank-20231213/">Fed won't stir the pot but rate cut timeline may be faster than ECB – Commerzbank</a></li><li><a href="https://www.forexlive.com/news/bofa-sees-fed-taking-the-first-steps-in-conveying-a-dovish-hold-today-20231213/">BofA sees Fed taking the first steps in conveying a dovish hold today</a></li><li><a href="https://www.forexlive.com/news/fed-could-struggle-in-convincing-markets-at-todays-meeting-td-20231213/">Fed could struggle in convincing markets at today's meeting – TD</a></li></ul><p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/uk-october-monthly-gdp-03-vs-00-mm-expected-20231213/">UK October monthly GDP -0.3% vs 0.0% m/m expected</a></li><li><a href="https://www.forexlive.com/news/eurozone-october-industrial-production-07-vs-03-mm-expected-20231213/">Eurozone October industrial production -0.7% vs -0.3% m/m expected</a></li><li><a href="https://www.forexlive.com/news/us-mba-mortgage-applications-we-8-december-74-vs-28-prior-20231213/">US MBA mortgage applications w.e. 8 December +7.4% vs +2.8% prior</a></li><li><a href="https://www.forexlive.com/news/china-november-m2-money-supply-100-vs-101-yy-expected-20231213/">China November M2 money supply +10.0% vs +10.1% y/y expected</a></li><li><a href="https://www.forexlive.com/news/germanys-scholz-says-to-stick-with-debt-brake-for-2024-budget-20231213/">Germany's Scholz says to stick with debt brake for 2024 budget</a></li><li><a href="https://www.forexlive.com/news/japan-at-a-critical-stage-on-whether-it-can-emerge-from-deflationary-mindset-says-kishida-20231213/">Japan at a critical stage on whether it can emerge from deflationary mindset, says Kishida</a></li><li><a href="https://www.forexlive.com/news/opec-says-recent-drop-in-oil-prices-caused-by-exaggerated-concerns-about-demand-growth-20231213/">OPEC says recent drop in oil prices caused by "exaggerated concerns" about demand growth</a></li></ul><p>Markets:</p><ul><li>CAD leads, NZD lags on the day</li><li>European equities slightly higher; S&amp;P 500 futures up 0.1%</li><li>US 10-year yields down 2.1 bps to 4.185%</li><li>Gold up 0.1% to $1,981.24</li><li>WTI crude up 0.3% to $68.85</li><li>Bitcoin up 0.2% to $41,169</li></ul><p>It was a more tentative session as markets are waiting on the FOMC meeting later today before further committing to any moves this week. The dollar was steadier throughout, with USD/JPY keeping around 145.60-80 mostly while EUR/USD is little changed just under the 1.0800 mark amid large option expiries at 1.0790 on the day.</p><p>The pound was a decent mover though, with GBP/USD dropping from 1.2550 to 1.2510 after a softer UK monthly GDP data for October. That saw rate cut odds for March next year ramp up from 46% to roughly 68% currently, with UK bond yields also slumping to the weakest since May.</p><p>In other markets, equities were tentative after the gains from Wall Street yesterday while Treasury yields are just slightly lower with plenty still to play for later in the day.</p><p>It's all about the Fed next before we get to more major central bank meeting decisions tomorrow in Europe.</p>

This article was written by Justin Low at www.forexlive.com.