Trading 2016 and beyond

EUR/USD is trading modestly flat above 1.0500 in the early European morning on Wednesday. The pair gyrates in a familiar range amid a broadly stable US Dollar and French political uncertainty, as the government faces a no-confidence vote in a busy day ahead. 

GBP/USD is consolidating gains below 1.2700 in early European trading on Wednesday. Traders refrain from placing fresh bets ahead of speeches from BoE Governor Bailey and Fed Chair Powell later in the day. US ADP Jobs and ISM Services PMI data are also awaited. 

Gold price attracts some sellers following an intraday uptick to the $2,650 supply zone and hits a fresh daily low during the first half of the European session on Wednesday. The precious metal, however, remains confined in a familiar range held over the past week or so as traders seem reluctant to place aggressive directional bets ahead of Fed Chair Jerome Powell's speech. 

The ADP Employment Change report is seen showing a deceleration of job creation in the US private sector in November. The ADP report could anticipate the more relevant Nonfarm Payrolls report on Friday.

This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.

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