Yen Appreciation and Dollar Weakness Continue: Focus on Weekend Market Trends
Review of the Week: Yen Strength and Dollar Weakness Dominate
This week saw the progression of yen appreciation and dollar weakness, with significant movements in the forex market. In particular, the end-of-month week and the U.S. Thanksgiving holiday triggered a market-wide adjustment mode, temporarily halting the previous dollar strength and yen weakness trend.
Key Points of Focus:
- Trump Tariffs and International Negotiations:
- The meeting between President Trump and the Mexican President eased hostile tensions, temporarily stabilizing the sharp declines in the Mexican Peso and Canadian Dollar.
- The U.S.-China semiconductor conflict saw optimism grow, with market participants believing the situation may not turn as severe as originally feared.
- Geopolitical Risk Easing:
- The ceasefire agreement between Israel and Hezbollah brought some relief to the market, slightly reducing risk-averse sentiment.
- Significant Dollar-Yen Decline:
- The dollar-yen pair saw a sharp drop from the 154 yen range at the start of the week to the 149 yen range, losing around 5 yen over the week.
- The U.S. FOMC minutes revealed support for a gradual interest rate cut, continuing to exert downward pressure on the dollar.
- On the other hand, growing expectations of a rate hike by the Bank of Japan (BoJ), along with Prime Minister Ishiba’s support for wage increases and a higher-than-expected CPI in Tokyo’s 23 wards, contributed to the yen’s appreciation.
Weekend Focus:
Key Economic Indicators to Watch Today:
- Turkey Real GDP (Q3 2024)
- Germany Retail Sales (October)
- France Real GDP (Final, Q3 2024)
- Germany Employment Statistics (November)
- Eurozone Consumer Price Index (HICP, Flash Estimate, November)
- Switzerland Real GDP (Q3 2024)
- India Real GDP (Q3 2024)
- Canada Real GDP (Q3 2024)
Key Speaking Events:
- ECB Vice President de Guindos and German Bundesbank President Nagel are set to attend events.
- The ECB’s Eurozone Consumer Inflation Expectations (October) and the Bank of England’s Financial Stability Report will be released.
Strategy: Next Moves in the Adjustment Market
- Trump Trade Adjustment:
- The question remains whether this week’s movement is just a month-end adjustment or if the yen’s strengthening trend will continue.
- With the U.S. market experiencing low trading volumes during the Thanksgiving week, the market’s close may influence next week’s direction.
- Strong Cryptocurrency Buying:
- The cryptocurrency market is again attempting to break through the $100,000 mark.
- With a bullish market trend, continuing to extend profits with a buying strategy remains effective.
Summary: This week saw dollar weakness and yen appreciation, while the Trump trade shifted into an adjustment phase. With numerous important indicators being released today, we can expect short-term volatility. It’s crucial to stay vigilant and assess the direction of the market for next week. In the cryptocurrency market, capitalizing on strong buying momentum and strategic positioning will be key to maximizing profits.
