Key Takeaways
US dollar is heading towards its best week in a month
Dollar index tracks greenback against a basket of currencies, up 1% for the week
US policy easing expectations decrease, pushing dollar higher
Sterling hit by weak GDP growth, showing a 0.1% contraction in October
Eurozone rates may see more cuts in the new year, as ECB hints at further easing
USD/CNY rises to two-year high after China’s economic conference
USD/JPY up due to Bank of Japan expected to keep interest rates steady next week
Pound Sterling fell sharply against major peers after UK GDP and factory output contracted in October- UK monthly GDP data resulted in Goldman Sachs cutting UK’s 2024 GDP growth forecast
Signs of consistent weakness in factory activity indicate producers are not operating at high capacity- Investors should prepare for volatility in the British currency next week due to upcoming economic data releases and Bank of England meeting
- GBP/USD pair dropped to near 1.2625 against the US Dollar and may face further downside
Support expected near 1.2500 for GBP/USD and resistance at 1.2810
Global economic updates are presenting different outcomes- Sterling has been impacted negatively
- Market fluctuations continue to shape currency trends
Investment in technology sectors is recommended- Be prepared for potential market fluctuations
Consider diversifying your portfolio
Emerging markets may present opportunities for growth
Stay informed and adjust strategies accordingly
Currency and Economic Outlook
The US dollar is on track for a positive week, heading towards its best performance in a month. This is a result of decreased expectations of US policy easing, pushing the dollar higher. Meanwhile, the British pound has faced challenges, with weak GDP growth and factory output leading to a sharp decline against major currencies. Investors should prepare for volatility in the British currency in the coming week, given the upcoming economic data releases and Bank of England meeting.
In the Eurozone, rates may see further cuts in the new year as the European Central Bank hints at additional easing measures. This, along with signs of consistent weakness in global factory activity, indicates that producers are not operating at high capacity. Market fluctuations continue to shape currency trends, making it essential for investors to be prepared for potential fluctuations.
When considering investment opportunities, diversifying portfolios and investing in technology sectors are recommended strategies. Emerging markets may offer growth opportunities for investors willing to stay informed and adjust their strategies accordingly.