Summary:
The dollar rose on Thursday; investors tempered Fed rate-cut expectations. Caution prevails after last month's risk rally, impacting markets.
EBC Forex Snapshot
4 Jan 2024
The dollar edged higher on Thursday as investors scaled back their expectations of rate cuts by the Fed this year, with caution hanging over markets after an impressive risk rally last month.
Minutes of December policy meeting released on Wednesday showed officials were convinced about disinflation and were concerned about the risks of over-tightening on the economy.
Data showed US manufacturing contracted further in December, though the pace of decline slowed, while job openings fell for the third straight month in Nov.
The loonie was not far away from its two-week low despite a spike in oil prices. Both the US and Canada will release their employment reports later in the day.
| Citi (as of 18 Dec) | HSBC (as of 4 Jan) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0724 | 1.1017 | 1.0826 | 1.1078 |
| GBP/USD | 1.2326 | 1.2848 | 1.2570 | 1.2790 |
| USD/CHF | 0.8667 | 0.8957 | 0.8310 | 0.8690 |
| AUD/USD | 0.6526 | 0.6750 | 0.6637 | 0.6846 |
| USD/CAD | 1.3381 | 1.3695 | 1.3213 | 1.3453 |
| USD/JPY | 139.48 | 147.50 | 140.70 | 145.41 |
The green numbers in the table indicate an increase in data, the red numbers indicate a decrease in data, and the black numbers indicate that the data remains unchanged.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The dollar held gains and rose slightly in Asia Monday as Japan's holiday cut liquidity, focusing attention on China's disappointing stimulus.
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The US dollar dipped from a two-month high but is set for a second consecutive weekly gain as weak labor market signals support faster Fed rate cuts.
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The US hovered near a two-month high on Thursday as markets grew confident in the Fed's patient monetary policy ahead of a key inflation report.
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