2024-01-03 10:29:44
Euro, Pound, Aussie Tumble; Yen, Stocks Slump, Yields Climb
Summary:
The Dollar Index (DXY), which gauges the value of the Greenback against a basket of 6 major currencies, began 2024 on a high note, rebounding 0.81% up from its 2023 close.
Bets that global interest rates would ease were pared, while bond yields soared. The 10-year US bond rate climbed to 3.94% (3.88%). Two-year US yields jumped 8 basis points to 4.33%.
Other global rates rose but to a lesser extent than those in the US. Germany’s 10-year Bund yield rose 4 basis points to 2.06%. The UK 10-year Gilt rate settled at 3.63%, up from 3.53% previously.
The Kiwi (NZD/USD) was the biggest loser, plummeting 1% to 0.6250 from 0.6320 in thin trade. The Euro (EUR/USD) slumped 0.8% to 1.0947 (1.1035). The Aussie Dollar (AUD/USD) fell 0.7% to 0.6762.
Against the Japanese Yen, the Greenback soared to 142.00 (141.05) in thin trade. Japanese markets were still closed today, observing a 4-day holiday. The recent earthquake with a magnitude of 7.6 which left thousands homeless had little or no effect on the Yen… so far.
Sterling (GBP/USD) slumped t0 1.2625 from 1.2735 on broad-based US Dollar strength. The UK Manufacturing PMI tumbled to 46.2 in December, down from 47.2 previously.
The Greenback was mostly higher against the Asian and Emerging Market Currencies. USD/CNH (Dollar-Offshore Chinese Yuan) rallied 0.53% to 7.1550 from 7.1250. USD/SGD climbed to 1.3267 (1.3197).
Wall Street stocks dropped on the higher US treasury rates. The DOW dipped to 37,625 from 37,705 previously. The US S&P 500 lost 0.96% to 4,730 (4.770). Australia’s ASX 200 lost 0.3% to 7,580.
Economic data released recently saw China’s Caixin Manufacturing PMI edge up to 50.8 from 50.7, beating median forecasts at 50.4. The US December Final Manufacturing PMI fell to 47.9 from 48.2.
On the Lookout:
Data releases today and for the rest of the week are light. The Federal Reserve’s FOMC minutes released early tomorrow morning (6 am, 4 January Sydney) is the big event for markets.
Other data released later today include Germany’s December Jobless Change (f/c 20K from 22K - ACY Finlogix).
Germany also releases its December Unemployment Rate (f/c 5.9% from 5.9% 0 ACY Finlogix).
Switzerland releases its December Manufacturing PMI (f/c 44 from 42.1 – ACY Finlogix).
The US rounds up today’s data releases with its US December ISM PMI (f/c 47.1 from 46.7 – ACY Finlogix), US December ISM Manufacturing Employment (f/c 46 from 45.8 – ACY Finlogix), US November JOLTS Job Openings (f/c 8.85 million from 8.733 million – ACY Finlogix), and finally the release of the FOMC Meeting Minutes.
Trading Perspective:
Expect thin and choppy conditions to keep traders on their toes today as more participants return to markets. The big event is the FOMC’s release of its latest meeting minutes. The US Dollar rebounded after several bouts of weakness as markets anticipated an easing from the Federal Reserve this year. There is less likelihood of that, as well as the risk-on sentiment extending today. Which will keep the US currency bid, with topside tests more likely.
(Source: Finlogix.com)
Have a good Wednesday ahead. Happy trading all.
This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
Sonrakileri Deneyin
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