The pound gained for a third day on Monday and was on track for its largest monthly rise versus the dollar in a year, largely a result of investors ditching the greenback ahead of what many believe will be a rapid shift to U.S. rate cuts in 2024. Separately, in a potential longer-term boost for sterling, Prime Minister Rishi Sunak announced a raft of foreign investments in Britain ahead of a gathering of business leaders. Sterling has gained nearly 4% versus the dollar this month, but has fared less well ...

USD: Too soon The DXY dollar index is down around 3.5% from its highs seen in October. The drop looks largely down to the view that the Federal Reserve’s tightening cycle is over and that portfolio capital can now be put back to work in bonds, equities, and emerging markets. While acknowledging that November and December are seasonally soft months for the dollar, our view is that this dollar sell-off has come a little early. We are bearish on the dollar through 2024 but expect the core driver to be ...

The U.S. dollar began the last week of November on the back foot and was on track for its biggest monthly drop in a year as traders eyed fresh economic cues in the week ahead to determine the future path of policy rates. A postponed OPEC+ meeting, the release of the Federal Reserve’s tracked measure of inflation alongside consumer prices data in the euro zone and Australia fill this week’s calendar, which will also see a rate decision from the Reserve Bank of New Zealand and Chinese PMI data. The ...

The South African rand weakened on Friday, giving back some gains from the previous session, when the central bank kept its main interest rate unchanged. At 1544 GMT, the rand traded at 18.8550 against the dollar , 0.19% weaker than its previous close. The dollar last traded around 0.4% weaker against a basket of global currencies. South Africa’s central bank stuck to its previous hawkish tone on Thursday as it kept its main lending rate unchanged for the third meeting in a row, boosting the rand, despite inflation quickening in ...

USD: Half-day trading US markets reopen today after the Thanksgiving holiday, but only for a half-day session. Expect volumes to be very thin again. On the data side, we’ll see the release of US S&P PMIs, a piece of data that has triggered a growing market impact, but may fail to decisively steer the dollar in a low-volume day. As we had expected, the dollar is stabilising amid reduced Thanksgiving flows, and an attempt to rally from the euro and sterling following somewhat encouraging PMIs didn’t last much longer. The ...

currency with six peers, eased 0.077% to 103.69, staying close to the two-and-a-half month low of 103.17 it touched earlier this week. The index is down 2.8% for the month, on course for its weakest monthly performance in a year on growing expectations the Federal Reserve is done raising interest rates and could start cutting them next year. Markets have dialled back expectations of Fed rate cuts in 2024, with futures now showing a 25% chance that it will cut its target rate at the March 2024 policy meeting, according ...

The euro edged up on Thursday after data suggested the downturn in the euro zone economy may be starting to ease, although holidays in the U.S. and Japan kept trading activity muted. With markets shut in Japan and the U.S. for Thanksgiving holidays, currencies traded with some volatility, as liquidity was thinner than usual. A flurry of preliminary surveys showed recession in economic powerhouse Germany may be shallower than expected, which offset a downbeat read of French business activity. Earlier in the day, the euro rose against most other major ...

USD: Stronger into the Thanksgiving holiday The dollar rose for a second consecutive session yesterday, this time helped by a surprise drop in initial jobless claims to 209k from 233k: an indication of good labour market resilience ahead of the 8 December payrolls data, which will be key in setting the tone for FX into Christmas. University of Michigan inflation expectations were revised higher, although durable goods orders came in softer than expected in October, which probably limited the scope of the market impact of jobless claims. Today, FX flows ...

The euro rose on Thursday for the first time this week, after data suggested the downturn in the euro zone economy may be starting to ease, although holidays in the United States and Japan kept trading activity muted. With markets shut in Japan and the United States for Thanksgiving holidays, currencies traded with some volatility, as liquidity was thinner than usual. A flurry of preliminary surveys showed recession in economic powerhouse Germany may be shallower than expected, which offset a downbeat read of French business activity. The euro rose broadly, ...

The dollar index rose on Wednesday, bouncing back from a 2-1/2 month low after economic data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week. Initial claims for state unemployment benefits dropped by 24,000 to a seasonally adjusted 209,000 for the week ended Nov. 18, the Labor Department said on Wednesday, the lowest level in more than a month. Economists polled by Reuters had forecast 226,000 claims for the latest week. Other data, however, showed orders for long-lasting U.S. manufactured goods fell ...

USD: Consolidation continues Federal Reserve minutes once again reiterated the cautious approach to interest rates, which did not excite the markets much. US equity markets broke a five-day winning streak and Treasuries ended a little lower again. For EUR/USD, this seems to be more of a non-event. Looking ahead, expect trading volumes to fall away into tomorrow’s US Thanksgiving holiday but the holiday means we get to see US initial jobless claims earlier than usual. Here, continued claims are expected to climb, reflecting a softening labour market. Today’s US calendar ...

The dollar rebounded from a 2-1/2 month low on Wednesday as the minutes from the Federal Reserve’s last meeting hinted that interest rates would likely remain restrictive for some time, even as the rate-hike cycle appeared to be over. The Fed minutes showed the central bank would proceed “carefully” and that “all participants judged it appropriate to maintain” the current rate setting. Fed officials agreed they would only raise interest rates if progress in controlling inflation faltered, reiterating recent comments by policymakers that left the door open for more tightening ...

The dollar index fell for a third straight session on Tuesday ahead of minutes from the U.S. Federal Reserve’s most recent policy meeting as expectations grow the central bank will start to cut rates in the early portion of next year. The dollar has stumbled as recent data has showed a slowing of the economy and inflation pressures, including the consumer price index (CPI) data, but not enough to increase fears a sharp recession is looming, leading markets to price out any additional Fed rate hikes. Investors are now attempting ...

USD: Existing home sales data in focus The dollar continues to edge lower as investors scale back long-held positions ahead of Thursday’s Thanksgiving US public holiday. We are going through a relatively benign phase for global asset prices currently, where even last night’s 20-year US Treasury auction went better than expected and temporarily parks concerns over the US fiscal trajectory. The auction results saw US yields drop 4-5bp at the long end of the curve and have helped the further paring back of short positions in the yen. Tokyo will ...

The dollar index fell to its lowest in more than two months on Monday, continuing a drop from the prior week, as investors largely believe the U.S. Federal Reserve has completed its interest rate hike cycle and look towards when the central bank may start to cut rates. The dollar index hit a low of 103.37, its weakest level since Sept. 1, after a tumble of nearly 2% last week, which marked the biggest weekly percentage drop since mid-July. Markets have priced out any additional Fed rate hikes, as recent ...