Summary:
The dollar is poised to finish 2023 lower, halting two years of gains. The market anticipates the Fed rate easing by March, causing the decline.
EBC Forex Snapshot
29 Dec 2023
The dollar was set to end 2023 lower, reversing two straight years of gains, dragged by market expectations that the Fed could begin easing rates as early as next March.
The yen also underperformed, extending into a third straight year of losses as the BOJ maintained its ultra-loose monetary policy in a year of aggressive interest rate hikes by other central banks.
BOJ Governor Kazuo Ueda said he was in no rush to unwind negative interest rates as the risk of inflation running well above 2% and accelerating was small, NHK reported on Wednesday.
| Citi (as of 14 Dec) | HSBC (as of 28 Dec) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0724 | 1.1017 | 1.0843 | 1.1243 |
| GBP/USD | 1.2326 | 1.2848 | 1.2590 | 1.2905 |
| USD/CHF | 0.8667 | 0.8957 | 0.8283 | 0.8697 |
| AUD/USD | 0.6445 | 0.6526 | 0.6632 | 0.6959 |
| USD/CAD | 1.3381 | 1.3695 | 1.3048 | 1.3492 |
| USD/JPY | 139.48 | 147.50 | 139.65 | 145.29 |
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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