USD/CAD Nears Two-Month Highs at 1.3850 as Traders Turn Cautious Before US Election
The USD/CAD pair holds steady with two consecutive days of gains, trading around 1.3850 in Friday’s Asian session. This level sits close to Thursday’s two-month high of 1.3868. The US Dollar’s strength underpins the pair’s resilience, fueled by growing expectations that the Federal Reserve may adopt a less aggressive stance on interest rate cuts.
Speculation surrounding the US presidential election in November is also boosting the Dollar, with former President Donald Trump gaining attention. His inflation-focused policies, including higher tariffs and tax cuts, are thought to be adding upward pressure on the Greenback.
During a rally in Las Vegas on Thursday, Trump emphasized his administration’s commitment to economic growth for all Americans, including African American, Hispanic, and Asian American communities, as reported by Reuters. Meanwhile, in Georgia, Vice President Kamala Harris held a rally with the support of prominent figures, including Bruce Springsteen, Tyler Perry, and former President Barack Obama, drawing thousands in the battleground state.
The Canadian Dollar (CAD), sensitive to commodity prices, is facing pressure as crude oil prices decline. Canada, the largest oil exporter to the US, is affected by West Texas Intermediate (WTI) crude’s drop, currently marking its third consecutive day of losses and trading around $70.20 per barrel.
Traders are watching for Canada’s Retail Sales data, due later in the North American session, and Bank of Canada (BoC) Governor Tiff Macklem’s speech at the IMF meeting, which could provide further insights into Canada’s economic outlook.
Daily & Weekly Analysis On Xtrememarkets
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Re: Daily & Weekly Analysis On Xtrememarkets
USD/CHF Stays Below 0.8650 as Market Caution Intensifies Ahead of US Presidential Election
USD/CHF remains steady around 0.8640 in Asian trading hours on Tuesday, following losses in the previous session. The US Dollar (USD) is holding its ground as market participants exercise caution amid uncertainties surrounding the upcoming US presidential election. Additionally, rising US Treasury yields provide further support for the Greenback.
Opinion polls indicate a tight race between former President Donald Trump and Vice President Kamala Harris. The outcome could remain undetermined for days after Tuesday’s vote, with both Trump and Harris expressing confidence while campaigning in Pennsylvania on the final day of this highly contested race.
The US Dollar Index (DXY), which tracks the USD against six major currencies, is trading around 103.90, with 2-year and 10-year US Treasury yields at 4.16% and 4.29%, respectively, as of this writing.The Swiss Franc (CHF) faces potential challenges as the likelihood of rate cuts by the Swiss National Bank (SNB) grows. This outlook is fueled by ongoing inflation slowdown in Switzerland, evidenced by a 0.6% year-over-year decline in the Consumer Price Index (CPI) for October. This CPI figure falls below the SNB’s fourth-quarter inflation target of 1%, raising the possibility of a more significant rate cut in December to maintain inflation within the bank’s target range of 0-2%.
USD/CHF remains steady around 0.8640 in Asian trading hours on Tuesday, following losses in the previous session. The US Dollar (USD) is holding its ground as market participants exercise caution amid uncertainties surrounding the upcoming US presidential election. Additionally, rising US Treasury yields provide further support for the Greenback.
Opinion polls indicate a tight race between former President Donald Trump and Vice President Kamala Harris. The outcome could remain undetermined for days after Tuesday’s vote, with both Trump and Harris expressing confidence while campaigning in Pennsylvania on the final day of this highly contested race.
The US Dollar Index (DXY), which tracks the USD against six major currencies, is trading around 103.90, with 2-year and 10-year US Treasury yields at 4.16% and 4.29%, respectively, as of this writing.The Swiss Franc (CHF) faces potential challenges as the likelihood of rate cuts by the Swiss National Bank (SNB) grows. This outlook is fueled by ongoing inflation slowdown in Switzerland, evidenced by a 0.6% year-over-year decline in the Consumer Price Index (CPI) for October. This CPI figure falls below the SNB’s fourth-quarter inflation target of 1%, raising the possibility of a more significant rate cut in December to maintain inflation within the bank’s target range of 0-2%.
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Re: Daily & Weekly Analysis On Xtrememarkets
USD/CHF Rises Above 0.8700 on Renewed US Dollar Demand
The USD/CHF pair edges up to approximately 0.8730 in early European trading on Friday, supported by a fresh wave of demand for the US Dollar. Market participants are awaiting the release of the preliminary US Michigan Consumer Sentiment data for November, along with remarks from Federal Reserve Governor Michelle Bowman later in the day.
On Thursday, the Federal Reserve cut borrowing costs by 0.25 basis points, reducing the federal funds rate to a range of 4.5%–4.75%, down from the previous 4.75%–5% range. This was a more modest reduction compared to the September cut. During the press conference, Fed Chair Jerome Powell stated that the US economy remains resilient and has shown meaningful progress toward the Fed’s long-term goals over the past two years.
Powell emphasized the importance of carefully calibrating interest rate adjustments to avoid any undue strain on the labor market. He noted that the Fed would continue to monitor economic data to guide the “pace and destination” of future rate changes. Meanwhile, the US Dollar has drawn some support as investors expect that economic policies may boost growth and inflation, potentially slowing the pace of rate cuts.
Meanwhile, global economic uncertainty and ongoing Middle East tensions may fuel demand for safe-haven assets, benefiting the Swiss Franc (CHF). The recent victory of President-elect Donald Trump has cast doubt on diplomatic efforts to resolve Israel’s multifront conflicts in the region, raising questions about the US’s long-term stance on support for Israel’s military activities against Iran and its allies.
The USD/CHF pair edges up to approximately 0.8730 in early European trading on Friday, supported by a fresh wave of demand for the US Dollar. Market participants are awaiting the release of the preliminary US Michigan Consumer Sentiment data for November, along with remarks from Federal Reserve Governor Michelle Bowman later in the day.
On Thursday, the Federal Reserve cut borrowing costs by 0.25 basis points, reducing the federal funds rate to a range of 4.5%–4.75%, down from the previous 4.75%–5% range. This was a more modest reduction compared to the September cut. During the press conference, Fed Chair Jerome Powell stated that the US economy remains resilient and has shown meaningful progress toward the Fed’s long-term goals over the past two years.
Powell emphasized the importance of carefully calibrating interest rate adjustments to avoid any undue strain on the labor market. He noted that the Fed would continue to monitor economic data to guide the “pace and destination” of future rate changes. Meanwhile, the US Dollar has drawn some support as investors expect that economic policies may boost growth and inflation, potentially slowing the pace of rate cuts.
Meanwhile, global economic uncertainty and ongoing Middle East tensions may fuel demand for safe-haven assets, benefiting the Swiss Franc (CHF). The recent victory of President-elect Donald Trump has cast doubt on diplomatic efforts to resolve Israel’s multifront conflicts in the region, raising questions about the US’s long-term stance on support for Israel’s military activities against Iran and its allies.
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Xtrememarkets
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Re: Daily & Weekly Analysis On Xtrememarkets
EUR/USD Hovers Near 1.0600 as US Dollar Retreats on Profit-Taking
The EUR/USD pair remains steady with a positive bias around the 1.0600 mark during Tuesday’s Asian session. The pair’s upward momentum appears supported by a softer US Dollar (USD), which is undergoing profit-taking after its recent rally.
Despite the USD’s pullback, its downside remains limited due to hawkish comments from Federal Reserve (Fed) Chair Jerome Powell. Powell emphasized the economy’s resilience, a robust labor market, and persistent inflation pressures, cautioning that the Fed sees no urgency to cut interest rates. Market participants are now awaiting further insights from Fed officials later this week regarding the future direction of monetary policy.
The USD could also regain strength as investors expect the incoming Trump administration to implement tax cuts and higher tariffs—policies that may drive inflation, potentially slowing the pace of Fed rate cuts.
On the European side, European Central Bank (ECB) President Christine Lagarde highlighted structural challenges in the region. Speaking on Monday, Lagarde called for a consolidation of resources in areas such as defense and climate, citing stagnating productivity growth and increasing global fragmentation into competitive blocs. She noted that Europe lags behind the US and China in innovation and productivity, with barriers such as a fragmented digital market and insufficient venture capital hindering technological progress.
Looking ahead, traders are focused on key economic data. The Eurozone’s October Harmonized Index of Consumer Prices (HICP) is due for release on Tuesday, followed by US Building Permits and Housing Starts data during the North American session. These reports could provide further direction for EUR/USD in the near term.
The EUR/USD pair remains steady with a positive bias around the 1.0600 mark during Tuesday’s Asian session. The pair’s upward momentum appears supported by a softer US Dollar (USD), which is undergoing profit-taking after its recent rally.
Despite the USD’s pullback, its downside remains limited due to hawkish comments from Federal Reserve (Fed) Chair Jerome Powell. Powell emphasized the economy’s resilience, a robust labor market, and persistent inflation pressures, cautioning that the Fed sees no urgency to cut interest rates. Market participants are now awaiting further insights from Fed officials later this week regarding the future direction of monetary policy.
The USD could also regain strength as investors expect the incoming Trump administration to implement tax cuts and higher tariffs—policies that may drive inflation, potentially slowing the pace of Fed rate cuts.
On the European side, European Central Bank (ECB) President Christine Lagarde highlighted structural challenges in the region. Speaking on Monday, Lagarde called for a consolidation of resources in areas such as defense and climate, citing stagnating productivity growth and increasing global fragmentation into competitive blocs. She noted that Europe lags behind the US and China in innovation and productivity, with barriers such as a fragmented digital market and insufficient venture capital hindering technological progress.
Looking ahead, traders are focused on key economic data. The Eurozone’s October Harmonized Index of Consumer Prices (HICP) is due for release on Tuesday, followed by US Building Permits and Housing Starts data during the North American session. These reports could provide further direction for EUR/USD in the near term.
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Xtrememarkets
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Re: Daily & Weekly Analysis On Xtrememarkets
USD/CAD Holds Near One-Week Low, Trades Range-Bound Above Mid-1.3900s
The USD/CAD pair has found support near the mid-1.3900s, marking a one-week low during Wednesday’s Asian session. However, the pair struggles to gain upward momentum, pausing this week’s pullback from its highest level since May 2020. Mixed fundamental signals keep bullish traders cautious.
Canadian Inflation and BoC Outlook
Canada’s annual inflation rate rose more than expected to 2.0% in October, prompting a recalibration of market expectations for a significant rate cut by the Bank of Canada (BoC) in December. This has provided some support for the Canadian Dollar (CAD), offsetting pressure on the USD/CAD pair. However, subdued crude oil prices continue to cap the Loonie’s gains, limiting its appreciation.
Crude Oil Dynamics
While fears of supply disruptions due to the Russia-Ukraine conflict persist, crude oil prices remain constrained by signs of increased U.S. stockpiles. The American Petroleum Institute (API) reported a larger-than-expected build of 4.75 million barrels in U.S. inventories last week, indicating ample supply and dampening oil’s recent recovery from a two-month low.
U.S. Dollar and Treasury Yields
On the U.S. side, a resurgence in dip-buying for the U.S. Dollar (USD) offers support to the USD/CAD pair. Expectations that U.S. fiscal policies under President-elect Donald Trump could stimulate economic growth and fuel inflation have bolstered U.S. Treasury yields, enhancing USD demand. This dynamic limits the pair’s downside potential.
Upcoming Market Catalysts
Looking ahead, market participants will closely monitor speeches by Federal Open Market Committee (FOMC) members for insights into the Federal Reserve’s rate trajectory. Additionally, the U.S. Energy Information Administration (EIA) will release official crude oil inventory data, which could impact oil prices and generate near-term trading opportunities for the USD/CAD pair.
In the absence of clear directional drivers, the USD/CAD pair is likely to remain range-bound in the short term, with traders focusing on incoming data and policy signals for further cues.
The USD/CAD pair has found support near the mid-1.3900s, marking a one-week low during Wednesday’s Asian session. However, the pair struggles to gain upward momentum, pausing this week’s pullback from its highest level since May 2020. Mixed fundamental signals keep bullish traders cautious.
Canadian Inflation and BoC Outlook
Canada’s annual inflation rate rose more than expected to 2.0% in October, prompting a recalibration of market expectations for a significant rate cut by the Bank of Canada (BoC) in December. This has provided some support for the Canadian Dollar (CAD), offsetting pressure on the USD/CAD pair. However, subdued crude oil prices continue to cap the Loonie’s gains, limiting its appreciation.
Crude Oil Dynamics
While fears of supply disruptions due to the Russia-Ukraine conflict persist, crude oil prices remain constrained by signs of increased U.S. stockpiles. The American Petroleum Institute (API) reported a larger-than-expected build of 4.75 million barrels in U.S. inventories last week, indicating ample supply and dampening oil’s recent recovery from a two-month low.
U.S. Dollar and Treasury Yields
On the U.S. side, a resurgence in dip-buying for the U.S. Dollar (USD) offers support to the USD/CAD pair. Expectations that U.S. fiscal policies under President-elect Donald Trump could stimulate economic growth and fuel inflation have bolstered U.S. Treasury yields, enhancing USD demand. This dynamic limits the pair’s downside potential.
Upcoming Market Catalysts
Looking ahead, market participants will closely monitor speeches by Federal Open Market Committee (FOMC) members for insights into the Federal Reserve’s rate trajectory. Additionally, the U.S. Energy Information Administration (EIA) will release official crude oil inventory data, which could impact oil prices and generate near-term trading opportunities for the USD/CAD pair.
In the absence of clear directional drivers, the USD/CAD pair is likely to remain range-bound in the short term, with traders focusing on incoming data and policy signals for further cues.
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Xtrememarkets
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Re: Daily & Weekly Analysis On Xtrememarkets
EUR/USD Slips Below 1.0550 Amid Awaited ECB Lagarde Speech and US PMI Data
The EUR/USD pair extended its decline to around 1.0530 during early Asian trading on Monday, pressured by a strengthening US Dollar (USD). Traders are focusing on key events scheduled for later in the day, including European Central Bank (ECB) President Christine Lagarde’s speech and the release of the US ISM Manufacturing PMI.
In the Eurozone, November’s Harmonized Index of Consumer Prices (HICP) rose to 2.3% year-over-year, up from October’s 2.0%, aligning with market expectations and surpassing the ECB’s 2.0% target. Core HICP also edged higher, rising to 2.8% YoY from 2.7% in the prior reading, meeting forecasts.
Markets are pricing in a 25 basis-point (bps) rate cut by the ECB in December, marking the central bank’s fourth reduction of the year. However, expectations for a larger 50 bps cut have waned, supported by marginal improvements in the Eurozone’s subdued growth outlook. Anticipation of rate cuts continues to weigh on the Euro (EUR).
Meanwhile, the US Dollar finds support from the Federal Reserve’s cautious stance. Fed Chair Jerome Powell recently emphasized the lack of urgency to lower interest rates, citing the economy’s resilience. “The strength we are seeing in the economy allows us to make decisions carefully,” Powell stated. According to the CME FedWatch Tool, markets currently estimate a 65.4% probability of a 25 bps Fed rate cut in December.
The diverging monetary policy outlooks between the ECB and the Fed are likely to drive further volatility in the EUR/USD pair as traders assess upcoming data and central bank signals.
The EUR/USD pair extended its decline to around 1.0530 during early Asian trading on Monday, pressured by a strengthening US Dollar (USD). Traders are focusing on key events scheduled for later in the day, including European Central Bank (ECB) President Christine Lagarde’s speech and the release of the US ISM Manufacturing PMI.
In the Eurozone, November’s Harmonized Index of Consumer Prices (HICP) rose to 2.3% year-over-year, up from October’s 2.0%, aligning with market expectations and surpassing the ECB’s 2.0% target. Core HICP also edged higher, rising to 2.8% YoY from 2.7% in the prior reading, meeting forecasts.
Markets are pricing in a 25 basis-point (bps) rate cut by the ECB in December, marking the central bank’s fourth reduction of the year. However, expectations for a larger 50 bps cut have waned, supported by marginal improvements in the Eurozone’s subdued growth outlook. Anticipation of rate cuts continues to weigh on the Euro (EUR).
Meanwhile, the US Dollar finds support from the Federal Reserve’s cautious stance. Fed Chair Jerome Powell recently emphasized the lack of urgency to lower interest rates, citing the economy’s resilience. “The strength we are seeing in the economy allows us to make decisions carefully,” Powell stated. According to the CME FedWatch Tool, markets currently estimate a 65.4% probability of a 25 bps Fed rate cut in December.
The diverging monetary policy outlooks between the ECB and the Fed are likely to drive further volatility in the EUR/USD pair as traders assess upcoming data and central bank signals.
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Re: Daily & Weekly Analysis On Xtrememarkets
GBP/USD Price Forecast: Bearish Bias Remains Unchanged Below 1.2700
The GBP/USD pair remains in positive territory for the second consecutive day, trading near 1.2690 during Wednesday’s early European session. However, the upside potential appears limited as expectations of a less aggressive interest rate cut by the US Federal Reserve and concerns over President-elect Donald Trump’s tariff policies lend support to the US Dollar. Investors are closely watching Federal Reserve Chair Jerome Powell’s speech for insights into the interest rate outlook.
From a technical perspective, the bearish bias for GBP/USD persists, with the pair holding below the critical 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI), hovering below the midline at 45.35, signals potential further downside.
Key support is located at the psychological level of 1.2600. A break below this level could expose the next target at 1.2467, the lower limit of the Bollinger Band, with further declines potentially testing 1.2331, the low from April 23.
On the upside, resistance is initially seen at 1.2750, the high from November 29. A sustained move above this level could pave the way for a rally toward 1.2875 (the 100-day EMA), with an additional resistance zone at 1.2920, aligning with the upper Bollinger Band boundary.
The GBP/USD pair remains in positive territory for the second consecutive day, trading near 1.2690 during Wednesday’s early European session. However, the upside potential appears limited as expectations of a less aggressive interest rate cut by the US Federal Reserve and concerns over President-elect Donald Trump’s tariff policies lend support to the US Dollar. Investors are closely watching Federal Reserve Chair Jerome Powell’s speech for insights into the interest rate outlook.
From a technical perspective, the bearish bias for GBP/USD persists, with the pair holding below the critical 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI), hovering below the midline at 45.35, signals potential further downside.
Key support is located at the psychological level of 1.2600. A break below this level could expose the next target at 1.2467, the lower limit of the Bollinger Band, with further declines potentially testing 1.2331, the low from April 23.
On the upside, resistance is initially seen at 1.2750, the high from November 29. A sustained move above this level could pave the way for a rally toward 1.2875 (the 100-day EMA), with an additional resistance zone at 1.2920, aligning with the upper Bollinger Band boundary.
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Re: Daily & Weekly Analysis On Xtrememarkets
EUR/USD Gains Momentum Ahead of Key NFP Data Release
The EUR/USD pair climbed on Thursday, rising by 0.7% to approach the 1.0600 level. The move comes as better-than-expected European retail sales data for October temporarily buoyed sentiment, despite a monthly decline. Meanwhile, expectations of an ECB rate cut and a risk-on market mood ahead of Friday’s US Nonfarm Payrolls (NFP) report are keeping the currency pair in focus.
ECB Poised for Another Rate Cut Amid Mixed Economic Signals
October retail sales across the EU increased by 1.9% YoY, beating the 1.7% forecast, though still sharply lower than September’s revised 3.0%. This decline in broader economic activity has led to rising expectations of more aggressive rate cuts from the European Central Bank (ECB). ECB President Christine Lagarde reiterated the bank’s commitment to fostering growth, projecting that inflation would ease again by 2025 despite a near-term bump in Q4.
Markets are pricing in a 25-bps rate cut from the ECB next week. Political turmoil in France, including President Emmanuel Macron surviving a no-confidence vote and planning to appoint a new Prime Minister, has been largely brushed aside by investors.
US Labor Market Data Adds Complexity to NFP Expectations
In the US, Initial Jobless Claims rose to 224,000 for the week ending November 29, the highest in six weeks, missing expectations of 215,000. Challenger Job Cuts also increased to 57,727 in November, signaling potential cracks in the labor market. However, these figures are seen as less significant compared to the looming NFP data, which is expected to show a strong rebound of 200,000 job additions in November following October’s hurricane- and strike-impacted figure of 12,000.
EUR/USD Technical Analysis
Current Outlook: The EUR/USD daily chart reflects a consolidation phase following a substantial downtrend that started in mid-July. After peaking near 1.1270, the pair experienced a steep decline, breaking below major support levels, including the 200-day EMA (1.0834) and the critical psychological level of 1.0600.
Recent Action: The pair recently rebounded from a November low of 1.0450, showing resilience around the 1.0588 level. Thursday’s bullish daily candle indicates growing momentum, with the pair breaking above the short-term resistance at 1.0550.
Upside Potential: A sustained move above 1.0600 could set the stage for further gains, potentially targeting the 50-day EMA at 1.0715. Breaking this level could validate a broader trend reversal and pave the way for a test of the 200-day EMA at 1.0834.
Downside Risks: On the downside, the MACD remains negative but shows signs of weakening bearish momentum. A failure to maintain the current rally could see EUR/USD revisiting support at 1.0500, with the critical 1.0450 low serving as a key threshold for bullish traders.
Key Levels to Watch:
Bullish Breakout: Daily close above 1.0600
Support Levels: 1.0500 and 1.0450
Resistance Levels: 1.0715 (50-day EMA) and 1.0834 (200-day EMA)
Market Sentiment
The EUR/USD’s performance hinges on Friday’s NFP data. A strong report could bolster the USD, potentially pressuring the pair back below 1.0550. Conversely, a weaker-than-expected NFP could fuel a risk-on rally, driving EUR/USD above 1.0600 and closer to 1.0700 in the near term. Traders should closely monitor the interplay between US labor data and ECB policy signals for the next directional move.
The EUR/USD pair climbed on Thursday, rising by 0.7% to approach the 1.0600 level. The move comes as better-than-expected European retail sales data for October temporarily buoyed sentiment, despite a monthly decline. Meanwhile, expectations of an ECB rate cut and a risk-on market mood ahead of Friday’s US Nonfarm Payrolls (NFP) report are keeping the currency pair in focus.
ECB Poised for Another Rate Cut Amid Mixed Economic Signals
October retail sales across the EU increased by 1.9% YoY, beating the 1.7% forecast, though still sharply lower than September’s revised 3.0%. This decline in broader economic activity has led to rising expectations of more aggressive rate cuts from the European Central Bank (ECB). ECB President Christine Lagarde reiterated the bank’s commitment to fostering growth, projecting that inflation would ease again by 2025 despite a near-term bump in Q4.
Markets are pricing in a 25-bps rate cut from the ECB next week. Political turmoil in France, including President Emmanuel Macron surviving a no-confidence vote and planning to appoint a new Prime Minister, has been largely brushed aside by investors.
US Labor Market Data Adds Complexity to NFP Expectations
In the US, Initial Jobless Claims rose to 224,000 for the week ending November 29, the highest in six weeks, missing expectations of 215,000. Challenger Job Cuts also increased to 57,727 in November, signaling potential cracks in the labor market. However, these figures are seen as less significant compared to the looming NFP data, which is expected to show a strong rebound of 200,000 job additions in November following October’s hurricane- and strike-impacted figure of 12,000.
EUR/USD Technical Analysis
Current Outlook: The EUR/USD daily chart reflects a consolidation phase following a substantial downtrend that started in mid-July. After peaking near 1.1270, the pair experienced a steep decline, breaking below major support levels, including the 200-day EMA (1.0834) and the critical psychological level of 1.0600.
Recent Action: The pair recently rebounded from a November low of 1.0450, showing resilience around the 1.0588 level. Thursday’s bullish daily candle indicates growing momentum, with the pair breaking above the short-term resistance at 1.0550.
Upside Potential: A sustained move above 1.0600 could set the stage for further gains, potentially targeting the 50-day EMA at 1.0715. Breaking this level could validate a broader trend reversal and pave the way for a test of the 200-day EMA at 1.0834.
Downside Risks: On the downside, the MACD remains negative but shows signs of weakening bearish momentum. A failure to maintain the current rally could see EUR/USD revisiting support at 1.0500, with the critical 1.0450 low serving as a key threshold for bullish traders.
Key Levels to Watch:
Bullish Breakout: Daily close above 1.0600
Support Levels: 1.0500 and 1.0450
Resistance Levels: 1.0715 (50-day EMA) and 1.0834 (200-day EMA)
Market Sentiment
The EUR/USD’s performance hinges on Friday’s NFP data. A strong report could bolster the USD, potentially pressuring the pair back below 1.0550. Conversely, a weaker-than-expected NFP could fuel a risk-on rally, driving EUR/USD above 1.0600 and closer to 1.0700 in the near term. Traders should closely monitor the interplay between US labor data and ECB policy signals for the next directional move.
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Xtrememarkets
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Re: Daily & Weekly Analysis On Xtrememarkets
GBP/USD Rebounds as US Dollar Weakens Amid Rising Fed Rate Cut Expectations
GBP/USD has recovered losses from the previous session, trading near 1.2770 during Thursday’s Asian session. The pair gains strength as the US Dollar (USD) retreats from a four-day winning streak, despite support from elevated US Treasury yields.
The US Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 106.50. Meanwhile, yields on US 2-year and 10-year Treasury bonds are reported at 4.16% and 4.28%, respectively.
The USD faces headwinds as the latest US Consumer Price Index (CPI) data does little to deter speculation of a Federal Reserve (Fed) rate cut in December. According to the CME FedWatch Tool, there is nearly a 99% probability of a 25-basis-point rate reduction during the Fed’s December 18 meeting. Market participants now turn their attention to the US November Producer Price Index (PPI), set for release later on Thursday, for further direction.
In the UK, the RICS Housing Price Balance jumped to 25% in November, up from 16% in October and exceeding the expected 19% increase. Published by the Royal Institution of Chartered Surveyors, this measure reflects a strengthening UK housing market, often viewed as a proxy for the broader economy.
The British Pound (GBP) benefits from growing market confidence in the Bank of England (BoE) maintaining its interest rate at 4.75% in December. BoE policymakers are widely expected to hold rates steady. Traders now shift their focus to the UK’s October monthly GDP data, scheduled for release on Friday, for additional economic cues.
GBP/USD has recovered losses from the previous session, trading near 1.2770 during Thursday’s Asian session. The pair gains strength as the US Dollar (USD) retreats from a four-day winning streak, despite support from elevated US Treasury yields.
The US Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 106.50. Meanwhile, yields on US 2-year and 10-year Treasury bonds are reported at 4.16% and 4.28%, respectively.
The USD faces headwinds as the latest US Consumer Price Index (CPI) data does little to deter speculation of a Federal Reserve (Fed) rate cut in December. According to the CME FedWatch Tool, there is nearly a 99% probability of a 25-basis-point rate reduction during the Fed’s December 18 meeting. Market participants now turn their attention to the US November Producer Price Index (PPI), set for release later on Thursday, for further direction.
In the UK, the RICS Housing Price Balance jumped to 25% in November, up from 16% in October and exceeding the expected 19% increase. Published by the Royal Institution of Chartered Surveyors, this measure reflects a strengthening UK housing market, often viewed as a proxy for the broader economy.
The British Pound (GBP) benefits from growing market confidence in the Bank of England (BoE) maintaining its interest rate at 4.75% in December. BoE policymakers are widely expected to hold rates steady. Traders now shift their focus to the UK’s October monthly GDP data, scheduled for release on Friday, for additional economic cues.
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