Key Takeaways
Market is focused on Canadian dollar and Australian dollar ahead of central bank meetings this week
Euro and major currencies are losing ground to a strong U.S. dollar
Analysts recommend shorting U.S. dollars into year-end due to overvaluations
Geopolitical developments and trades support staying long on the dollar
Dollar trading around 149.93 yen and euro at $1.0537
Dollar index rose to 106.20
Bitcoin last at $99,515 after hitting a record $103,649
U.S. consumer price inflation (CPI) data this week will impact future Fed rate cuts
European Central Bank (ECB) policy meeting and China’s Central Economic Work Conference watched closely- Bank of Canada, Reserve Bank of Australia, and Swiss National Bank meetings this week with rate cuts expected
Analysts suggest that the U.S. dollar is losing momentum after a strong run since the U.S. presidential election
The dollar slipped against the yen and euro, but the dollar index rose slightly- Bitcoin reached a record high last week
Expectations of deep rate cuts by the Bank of Canada and Reserve Bank of Australia
The Canadian dollar near a 4-1/2-year low
Risk of a larger rate cut by the Swiss National Bank- U.S. 10-year Treasury yields fell after November payrolls data
- Investors keeping an eye on U.S. CPI data for potential impact on future rate cuts
AUD/USD hits a 13-month low following disappointing GDP figures and robust US non-farm payrolls
Q3 Australia GDP figures fell short of expectations, leading to anticipation of RBA interest rate cuts in early 2025- US non-farm payrolls data strengthened the US dollar
Chinese CPI and PPI figures missed expectations- RBA kept its official cash rate on hold at 4.35% for the eighth straight meeting
- AUD/USD has fallen 8.25% over a ten-week period
- Crucial for AUD/USD to remain above key support zone to avoid further declines
- U.S. inflation data crucial for U.S. interest rate decision
- Bank of Canada expected to cut rates, uncertainty on size of cut
Brazil to increase rates, market expects 75 basis-point hike- RBA may keep interest rates unchanged, potential for cut in February
Bank of Japan Tankan survey and revised GDP data in focus- Chinese inflation data to indicate demand trends and economic revival efforts
Market Watch: Currency Moves and Central Bank Meetings
The global foreign exchange market remains focused on the upcoming central bank meetings and major currency movements. The Canadian dollar and Australian dollar are particularly in the spotlight as investors anticipate policy decisions from the Bank of Canada, Reserve Bank of Australia, and the Swiss National Bank.
Meanwhile, the U.S. dollar continues to show strength against the euro and other major currencies, with geopolitical developments and trades supporting a long position on the dollar. Analysts are cautious about the overvaluation of the U.S. dollar and recommend shorting it into year-end.
Key economic data releases, such as U.S. consumer price inflation (CPI) and Chinese inflation figures, are expected to impact future interest rate decisions. The European Central Bank (ECB) policy meeting and China’s Central Economic Work Conference are also closely monitored by investors for potential market shifts.
In the cryptocurrency market, Bitcoin hit a record high last week but saw some retracement in its price. Overall, investors are keeping a close eye on various economic indicators and central bank decisions to navigate the volatile currency market landscape.