On December 22, preliminary monthly data released by the European Commission showed that the Eurozone consumer confidence index dropped to -14.6 in December from -14.2 in November, missing economists' consensus forecast of -14.0. This further extended the index's prolonged underperformance relative to historical averages. Notably, the data came just a day after the European Central Bank (ECB) announced it would keep interest rates unchanged. ECB President Christine Lagarde had emphasized that the Eurozone economy had performed better than expected despite U.S. tariff hikes, with inflation steadily approaching the 2% policy target, putting the central bank in a "favorable position." However, market optimism remains constrained by multiple factors. Earlier data had already indicated a significant slowdown in Eurozone business activity by late 2025, and the latest decline in consumer confidence suggests that the long-awaited economic recovery may face further obstacles. Future attention will focus on inflation trends and the momentum of economic recovery.
Meanwhile, data from the UK Office for National Statistics on Friday revealed that UK retail sales in November 2025 edged down 0.1% month-on-month, missing market expectations of a 0.4% increase. The previous month's figure was also revised downward to a 0.9% decline. This marks the second consecutive monthly contraction, primarily driven by weaker demand in non-store retailing, particularly among online jewelers reporting subdued demand amid stabilizing precious metal prices. Supermarket sales also fell for the fourth straight month, reflecting low foot traffic. However, a 1.0% increase in non-food store sales partially offset the overall decline. Department stores benefited from extended Black Friday discounts, while footwear and leather goods retailers also posted gains. Automotive fuel sales rebounded from the previous month's decline, slightly exceeding September 2025 levels. Year-on-year, retail sales grew 0.6% in November, unchanged from the previous month but below the 0.9% market forecast.
Key data to watch today include the UK Q3 production-based GDP annualized final reading and the UK Q3 current account.
**USD Index** The USD index edged higher on Friday, posting a modest gain as it currently trades around 98.60. Continued short-covering and lingering support from strong U.S. employment data earlier in the week bolstered the greenback. However, overall weak U.S. economic data released during the session limited the index's upward momentum. Resistance is eyed near 99.00, with support around 98.20.
**EUR/USD** The euro traded sideways on Friday, closing slightly lower near 1.1710. The rebound in the USD index, supported by positive employment data, weighed on the pair, while disappointing Eurozone economic data added further pressure. Nevertheless, the ECB's recent hawkish signals helped cap losses. Resistance is seen near 1.1800, with support around 1.1600.
**GBP/USD** Sterling consolidated with a slight decline on Friday, currently hovering near 1.3390. The USD's continued rebound and weaker-than-expected UK economic data, including an unexpected drop in November retail sales, pressured the pound. However, expectations that the Bank of England's rate-cutting cycle is nearing its end limited downside movement. Resistance is anticipated near 1.3500, with support around 1.3300.
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