The market has started for December, with only one month left in the year. It’s a common pattern that the Christmas mood usually kicks in after passing through the U.S. FOMC meeting, and active trading is expected to be limited to the first half of the month when U.S. employment statistics and consumer price index data are scheduled to be released.
Yesterday, the dollar gained ground as Federal Reserve officials like the President of the Federal Reserve Bank of San Francisco and the President of the Federal Reserve Bank of New York displayed hawkish stances. On Tuesday, Federal Reserve Board Governor Waller, known for his hawkish stance, mentioned that inflation was slowing down, leading to speculation in the market about the possibility of an early rate cut. This had previously led to the dollar being sold.
As a result of the rebound in the dollar market yesterday, the dollar index has been testing resistance levels such as the 10-day moving average and the 200-day moving average. If today’s market, as it approaches the weekend, manages to convincingly break through these resistance levels, it may indicate a change in the December market’s trend. However, expectations of a peak in U.S. interest rates as the underlying trend are still strong, and if the dollar’s upward movement remains in check, the dollar’s weakening trend may continue this month as well. Therefore, it will be important to monitor the movements in the dollar market in the overseas markets that follow.
Scheduled economic indicators include the Nationwide House Price Index (November), Swiss Real GDP (Q3), Swiss SVME Purchasing Managers’ Index (PMI) (November), Final Manufacturing PMI for France, Germany, the Eurozone, the UK, and the US (November), Canadian Employment Statistics (November), US Construction Spending (October), and US ISM Manufacturing Purchasing Managers’ Index (November), among others.
Regarding speech-related events, Chicago Federal Reserve President Goolsbee, Federal Reserve Chairman Powell, and Federal Reserve Governor Lael Brainard are expected to participate in speeches and events. With the blackout period approaching this weekend, there is likely to be market interest in the content of Chairman Powell’s speech. This week, the market has been influenced by hawkish comments from several Federal Reserve officials, and market reactions are expected. However, since Chairman Powell’s participation is in a discussion related to technology and entrepreneurial spirit, there may be some caution in making specific statements about economic outlook and monetary policy.
While the market has been influenced by comments from U.S. officials this week, the overall trend still leans towards USD weakness. Therefore, the USD selling bias continues.
