The dollar gave back some of its gains on Tuesday, having posted advances against most of its major peers on Monday. Investors remain unsure as to whether the Fed will lower interest rates again at its 18th December meeting, but recent communications from FOMC members perhaps suggest that a cut is more likely than not.
Voting member Christopher Waller said earlier in the week that he still supported a December cut, as this would still allow ample room to slow the pace of rate reductions at a later date. Waller is just one voting member, however, and until markets are confident that this is a view shared by the majority of the committee, one-sided bets against the greenback could be limited.
The rest of the week will see the release of a handful of important economic data points.
Today’s revised PMI figures are not expected to rock the boat, but Friday’s nonfarm payrolls report almost certainly will. There is a high degree of uncertainty surrounding the data, not least as the October report appeared to be heavily impacted by hurricanes in the south.
Consensus is for an NFP print around the 200k level, but a downside surprise akin to last month’s report may be enough to seal the deal for a December Fed rate cut.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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AUD/USD holds below 0.6150 on bullish US Dollar, stronger US NFP report
The AUD/USD pair remains on the defensive around 0.6145 during the early Asian session on Monday. The US job growth came in stronger than expected in December, supporting the US Dollar broadly.
EUR/USD: Central banks’ imbalances put parity at a stone’s throw
The EUR/USD pair remained under selling pressure last week, with the US Dollar retaining its overall strength. The Greenback benefited from risk-aversion bouts, triggered by United States President-elect Donald Trump’s tariffs plan.
Gold: Bulls come out of the woodwork
Following a bearish opening to the week, Gold reversed its direction and registered gains for four consecutive days, reaching its highest level since December 13 above $2,680. As market attention turns to next week’s key data releases from China and the United States, Gold’s technical outlook points to a buildup of bullish momentum.
Week ahead: US CPI and China GDP in focus, UK data eyed too as pound skids
US inflation report to take centre stage as dollar remains well bid. China’s economic policies to come under scrutiny as Q4 GDP on tap. UK CPI and GDP figures to be watched as pound’s pain worsens.
Think ahead: Mixed inflation data
Core CPI data from the US next week could ease concerns about prolonged elevated inflation while in Central and Eastern Europe, inflation readings look set to remain high.
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