The euro rose in European trading on Tuesday against a basket of global currencies, resuming gains after a three-day pause against the US dollar as part of profit-taking from last week’s seven-week highs. The move back into positive territory reflects renewed investment demand for the single currency, supported by expectations that the interest-rate gap between Europe and the US is set to narrow.

The Federal Reserve is expected on Wednesday to deliver a third rate cut this year, while improving economic activity in Europe is paving the way for a more hawkish stance from the European Central Bank in upcoming meetings.

Price Overview

• EUR/USD rose 0.1% to $1.1650 from an opening price of $1.1637, after touching an intraday low of $1.1632.

• The euro ended Monday down 0.15% in a third straight daily loss as profit-taking continued from last week’s seven-week high of $1.1682.

US Dollar

The dollar index fell 0.1% on Tuesday, resuming the decline that briefly paused yesterday, reflecting renewed weakness in the US currency against major and minor peers.

The final Fed meeting of the year begins later today, with decisions due Wednesday. Markets continue to price in a 25-basis-point rate cut — the third consecutive cut this year.

European Interest Rates

• Last week’s data showed an unexpected rise in headline eurozone inflation for November, highlighting persistent price pressures facing the ECB.

• After the inflation release, market pricing for a 25-bp ECB rate cut in December dropped from 25% to 5%.

• Reuters reported that the ECB is likely to leave rates unchanged at the December meeting.

• Investors await further eurozone data before the 17–18 December meeting to reassess expectations.

Interest-Rate Gap

The current rate gap between Europe and the US stands at 185 basis points in favor of the US. Markets expect it to narrow to around 160 basis points this week following the Fed decision.

A narrowing of the transatlantic rate gap to its smallest range since May 2022 would provide additional support for EUR/USD.

The Australian dollar jumped in Asian trading on Tuesday to its highest level in three months against the US dollar, extending the strong rally that briefly paused yesterday as markets took a breather. The move reflects renewed demand for the Aussie, which traders currently view as one of the most attractive opportunities in the FX market.

The buying momentum strengthened after the Reserve Bank of Australia left interest rates unchanged for a third consecutive meeting and warned that inflation risks remain tilted to the upside.

Some analysts now believe the RBA may be forced to discuss a potential rate hike at its next meeting in February 2026 if inflation pressures continue to build at the recent pace.

Price Overview

• AUD/USD rose 0.4% to 0.6649 — the highest level since 18 September — from an opening price of 0.6621, after touching an intraday low of 0.6608.

• The Australian dollar ended Monday down 0.25% in its first daily loss in five sessions amid profit-taking.

Reserve Bank of Australia

In line with expectations, the RBA kept the cash rate unchanged at 3.60%, its lowest in roughly two and a half years. All members voted unanimously to maintain rates for a third straight meeting.

The central bank justified its decision as a careful balance between persistent inflation pressures and otherwise strong economic data. It noted that although inflation has eased substantially from its 2022 peak, recent readings show a renewed and broader pickup that warrants close monitoring.

The RBA said economic activity continues to recover, supported by solid private demand in consumption and investment, while housing-market conditions keep improving.

Michelle Bullock

RBA Governor Michelle Bullock reiterated on Tuesday that:

• The bank did not discuss cutting or hiking rates — “hold” was the only option considered.

• The latest inflation figures were “materially higher than expected,” suggesting price pressures remain, even if some components are temporary.

• Future policy decisions will depend on incoming data — inflation, domestic demand, and labor-market conditions — meaning no path (up or down) is predetermined.

• The current policy stance is “mildly restrictive,” and the full impact of previous rate cuts has yet to materialize, making patience essential.

Australian Interest Rates

• Most market forecasts expect rates to remain unchanged for an extended period in 2026 unless inflation or growth data shift meaningfully.

• Some analysts believe the RBA may need to revisit the possibility of a rate hike in February 2026 if inflation pressures intensify.

• Market pricing currently assigns less than a 50% probability of a 25-basis-point hike in February 2026.

• Investors are awaiting further data on inflation, unemployment, and wage growth to reassess these odds.

Gold prices slipped on Monday as the dollar edged higher against most major currencies, with traders closely watching this week’s Federal Reserve meeting.

A series of global central bank meetings is scheduled over the coming days, headlined by the Fed’s policy decision.

Markets widely expect the Federal Reserve to cut its benchmark rate by 25 basis points for the third time in 2025, while attention will focus on the quarterly economic projections from FOMC members.

The dollar index rose around 0.1 percent to 99.08 by 20:53 GMT, after touching a high of 99.2 and a low of 98.7.

Spot gold fell 0.5 percent at 20:53 GMT to 4221.7 dollars an ounce.

The pace of digital innovation is accelerating across the oilfield services sector as companies adapt to shifting market conditions, creating opportunities for long-term and sustainable growth. According to Rystad Energy, the global oil and gas industry could save more than 320 billion dollars over the next five years by expanding digitalisation across five core areas: drilling optimisation, autonomous robotics, predictive maintenance, reservoir management, and logistics improvement.

The broader oilfield services ecosystem is set for a major transformation, supported by ongoing merger and acquisition activity, growing partnerships with technology companies, and deeper software integration.

Rystad notes that the 320 billion dollar estimate is conservative. Wider adoption of digital technologies across additional business lines could unlock even greater value. To achieve this, executives will need to prioritise digital transformation and encourage a culture that is less risk-averse.

Digital reporting is becoming increasingly important, even though unified standards for measuring digital earnings remain limited. Most suppliers still do not publish standalone digital profits under GAAP, unlike pure cloud software companies.

However, this landscape is changing. SLB now reports its digital division separately and expects its margins to reach about 35 percent in 2025. Another example is Viridien, a global leader in geoscience technology, whose digital and data-environment division generated 787 million dollars in revenue last year, with EBITDA of 458 million dollars. Digital revenue streams tend to offer steadier growth and are less exposed to fluctuations in upstream capital spending.

Benny Baga, senior vice president of supply chain, said the investment community is increasingly focused on technology-driven strategies in the energy sector, and that service companies offering recurring technology-based revenues tend to receive higher valuations. He added that this depends on a clear ability to scale, and that digitalisation is a direct route to long-term value creation.

Despite the advantages, large-scale adoption of digital oilfields faces significant challenges, including high upfront costs for hardware, software, ongoing maintenance, and cybersecurity. These pressures are particularly difficult for smaller companies or operators with older infrastructure. To overcome this, mid-tier firms are adding selective digital capabilities, while smaller players and software specialists focus on modular and customisable solutions.

Another major trend is the rapid growth of partnerships with technology firms, complementing internal capability building and digital-focused acquisitions. Such partnerships have increased sharply since 2021, with notable acceleration in the past two years among major companies including SLB, Halliburton, NOV, and Baker Hughes. This pattern reflects a clear industry shift toward digital transformation, as leading suppliers rely more heavily on technology partners to modernise operations and capture new efficiencies.