The dollar faces its worst week since July
2023-12-15
Summary:
The dollar is poised for the biggest weekly drop since July as the Fed signals next-year rate cuts. European central banks maintain restrictive policies.
EBC Forex Snapshot
15 Dec 2023
The dollar was set for its deepest weekly drop since July after the Fed sent its clearest signal of rate cuts for next year. central banks in Europe decided to stick with restrictive policies.
Markets are now pricing in a 75% chance of a rate cut in March by the Fed and 150 bps in reductions by Dec 2024, according to CME FedWatch tool. That sent the 10-year Treasury yield to its lowest since July.
Sterling was up over 1% on Thursday, hitting a fresh four-month peak. The MPC said interest rates would need to be kept high for an “extended period of time” and left open the option of further rate rises if necessary.
| Citi (as of 1 Dec) | HSBC (as of 15 Dec) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0852 | 1.102 | 1.0803 | 1.1098 |
| GBP/USD | 1.2347 | 1.2746 | 1.2577 | 1.2874 |
| USD/CHF | 0.8684 | 0.8957 | 0.8592 | 0.8792 |
| AUD/USD | 0.6522 | 0.6750 | 0.6571 | 0.6776 |
| USD/CAD | 1.3417 | 1.3695 | 1.3311 | 1.3581 |
| USD/JPY | 146.70 | 151.91 | 138.65 | 147.38 |
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.
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