USD weaker on Fed hopes
Global markets extended last week’s rally to close strongly higher on Friday with US technology stocks leading the charge.
The Dow Jones index was up 0.6% on Friday for a weekly gain of 3.3%. The tech-focused Nasdaq gained 0.7% on Friday to climb 4.9% for the week.
Financial markets were mainly boosted by renewed hopes for a Federal Reserve rate cut when the US central bank meets next week.
In FX markets, the US dollar was lower in all five sessions last week, with the USD index falling to two-week lows.
The euro underperformed last week while the GBP was mostly stronger despite the volatility around last week’s UK budget.
The Japanese yen continued to fall ahead of the 10 December Bank of Japan decision, where markets see an 83% chance of a rate cut.
Aussie, kiwi outperform
The Australian and NZ dollars were both stronger last week.
The AUD/USD was up 0.2% on Friday for a 1.4% weekly gain. The AUD/USD finished Friday with the highest daily close since 31 October.
The NZD/USD gained 0.1% with a weekly gain of 2.2%.
The USD/SGD was weaker with the pair falling to the lowest level since late October.
Similarly, the USD/CNH also fell, with the pair at one-year lows.
US data key ahead of Fed
Looking to the week ahead, the highlight in the US will be the release of the Personal Consumption Expenditures (PCE) inflation gauge – favoured by the Fed over CPI as a more comprehensive basket.
With the non-farm payrolls report now delayed until after the Fed’s meeting, private data such as ADP and Challenger will draw greater attention. These private sector surveys may offer a cleaner read on labour market momentum at a time when official government data may be distorted by shutdown-related layoffs. The next US jobs report is currently scheduled for 17 December.
In the eurozone, a batch of headline data is due: retail sales (Thursday), CPI (Tuesday), and unemployment (Tuesday).
Around the region, Australian GDP, due Wednesday, is likely to be the highlight.
Aussie, kiwi at highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 1 – 6 Dec
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
