URGENT UPDATE: Forex markets are experiencing thin liquidity as of December 22, 2025, with many wholesale participants already closed for the holiday season. Market conditions are expected to remain volatile until trading picks up again on January 5, 2026. Retail traders are advised to exercise caution as prices may swing unpredictably.
As Asian trading centers gradually open, the lack of liquidity is causing significant fluctuations in forex prices. With many traders away for the holidays, the overall market activity is sharply reduced. Experts warn that this could lead to choppy trading conditions, making it a challenging environment for those who continue to participate.
Today’s forex calendar is nearly empty, and the anticipated rate-setting by the People’s Bank of China (PBOC) is deemed a non-event. The central bank maintained the Loan Prime Rates (LPR) steady in November, marking the sixth consecutive month without changes. The one-year LPR, crucial for most lending in China, remains unchanged, while the five-year rate, which influences mortgage pricing, is also stable.
The PBOC’s current reverse repo rate stands at 1.4% for the 7-day term. This rate is significant as it serves as a benchmark for influencing other lending rates, including the LPRs. The last adjustments to the LPR occurred in May when both rates were trimmed by 10 basis points.
Traders are encouraged to preserve capital and prepare for the upcoming trading year, as liquidity issues are likely to persist throughout the holiday period. Coverage on InvestingLive will diminish until early January, although essential updates will still be provided.
As the market braces for a slow week ahead, participants are urged to stay informed and cautious. With many traders absent, this is a crucial time to assess strategies and remain aware of the shifting dynamics in the forex landscape.
Stay tuned for further updates as we monitor the situation closely.
