|

Forex Today: US Dollar extends slide to start the week, eyes on PMI data

Here is what you need to know on Monday, December 5:

US Dollar struggles to find demand to start the week with the US Dollar Index, which lost nearly 1.5% last week, trading at its weakest level since late June below 104.30 in the early European session. S&P Global will release the final November Composite PMI surveys for Germany, the Eurozone, the UK and the US on Monday. Sentix Investors Confidence and Retail Sales data will also be featured in the European economic docket. Finally, market participants will watch the ISM Services PMI from the US closely in the second half of the day.

On Sunday, several cities in China decided to ease coronavirus curbs, helping the risk sentiment improve during Asian trading hours. Urumqi, the capital of the Xinjiang region, said that shopping centres, restaurants and markets will open from Monday.  Zhengzhou residents will not be required to show COVID test results to take public transport, taxis and to visit public areas. Officials also announced that people living in Nanning will not have to provide a negative COVID test to take the subway. Although the data from China revealed that the Caixin Services PMI declined to 46.7 in November from 48.4 in October Asian equity indexes performed well on Monday. The Shanghai Composite gained 1.5% and Hong Kong's Hang Seng rose more than 3%.

Nevertheless, US stock index futures trade virtually unchanged and the 10-year US Treasury bond yield stays in positive territory slightly above 3.5%.

Meanwhile, following its meeting over the weekend, OPEC and its allied producers (OPEC+) have agreed to maintain their current oil-output targets despite a recent decline in energy prices. Crude oil prices showed no immediate reaction to this decision and the barrel of West Texas Intermediate was last seen trading in a narrow channel at around $80.

EUR/USD continued to push higher toward 1.0600 and reached its strongest level in over five months early Monday. Europen Central Bank (ECB) board member François Villeroy de Galhau said on Sunday that he is in favour of a 50 basis point rate hike in December but this comment doesn't seem to be having a significant impact on the Euro's performance against its rivals.

After having closed the fourth straight week in positive territory, GBP/USD preserved its bullish momentum early Monday and climbed above 1.2300 for the first time since late June. Although the pair edged slightly lower in the early European morning, it continues to trade in positive territory above 1.2300.

USD/JPY lost nearly 500 pips last week and started the new week in a calm manner. The data from Japan showed that the Jibun Bank Services PMI came in at 50.3 in November, slightly higher than the flash estimate of 50. USD/JPY largely ignored this data and was last seen moving sideways above 134.50.

AUD/USD gained traction during the Asian trading hours and climbed above 0.6800. Early Tuesday, the Reserve Bank of Australia will announce monetary policy decisions early Tuesday.

Reserve Bank of Australia Preview: Hinting toward an end to its rate hike cycle?

Gold price edged lower on Friday after the upbeat November jobs report from the US but managed to climb above $1,800 early Monday. With the 10-year US T-bond yield holding steady, however, XAU/USD seems to be having a difficult time gathering bullish momentum for now.

Bitcoin gained traction to start the new week and was last seen trading at its highest level in three weeks at around $17,300. Ethereum is up more than 1% on Monday, trading near $1,300.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

AUD/USD consolidates near 0.7000 as USD stays weak

AUD/USD holds steady above 0.7000 during Thursday’s Asian session, consolidating the previous day’s recovery gains from a near three-week low as the Democratic sweep in the US midterm elections and Iran diplomacy hopes continue to weigh on the US Dollar. Bulls, however, seem hesitant as focus shifts to Friday’s crucial US NFP report.

USD/JPY drifts lower to 158.25 on hawkish BoJ Minutes, weak USD

USD/JPY trades with a negative bias for the second straight day on Thursday as hawkish BoJ Minutes, showing members agreed to keep raising rates, and intervention risks support the Japanese Yen. Meanwhile, US midterm election results and hopes for Iran diplomacy keep the US Dollar depressed as focus shifts to Friday’s US NFP report.

Gold hits one-week top near $4,080 on sliding US bond yields and weak USD

Gold builds on the previous day’s blowout rally, climbing to $4,080 during the Asian session on Thursday as falling US bond yields keep the US Dollar depressed near a one-month low, touched in reaction to Democrats’ victories in the US midterm elections. However, December Fed hike bets might cap the non-yielding bullion ahead of Friday’s US NFP report. 

Circle reserve income falls 8% as ARC presale lifts Q3 revenue
Circle (CRCL) reported increased revenue in its Q3 earnings update on Wednesday as the $182 million ARC token presale offset the decline in reserve income. The stablecoin issuer stated that total revenue and reserve income reached $865 million in Q3, up 17% from a year earlier. Net income from continuing operations increased 5% to $226 million, while adjusted EBITDA climbed 85% to $317 million.
US midterms 2026: Investor Q&A on the Democratic sweep
1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important. 2. AI faces a higher hurdle, not an extinction event.
US Dollar breaks below 101.50 as Democrats sweep Congress
The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.