On Friday (November 25), the dollar index hovered at a low level, and the current trading was around 105.87. The US dollar index fell for three consecutive trading days, hitting a low of 0.27% on Thursday, closing at 105.85, a drop of about 0.27%. Below, pay attention to the support of the 200 daily moving average 105.33; the previously released US Federal Reserve 11 November meeting minutes support the view that it will slow down the hiccup from the December meeting, which is a significant drag on the US dollar, even if Thursday is the US Thanksgiving holiday.
Non-US currencies generally rose, with the New York dollar and the pound rising relatively strongly. The pound continued to hit a new high of more than three months against the US dollar on Thursday to 1.2153, and the New York dollar continued to hit a new high of more than three months against the US dollar on Thursday to 0.6288.
The highly-watched November 1-2 minutes show officials are largely at ease that they can now slow down their rate hikes, which could raise 50 basis points next month after four consecutive hikes of 75 basis points. "The Fed will be happy to raise the interest rate by 50 basis points in December and 25 basis points from the first meeting next year," said Niels Christensen, chief
Nordea, chief analyst Niels Christensen. He noted that the Fed will still feel the need to take further action to reduce inflation. "As long as the Fed sees the labor market strengthening, it won't be too worried about tightening policies." The U.S. dollar index, which measures the dollar exchange rate against six major competing currencies, fell 0.27% on Thursday to close at 105.85, with the current 200-day moving average supporting around 105.33, and the support for the more than three-month low set on November 15 is also near that position.
The Fed has raised interest rates to its highest level since 2008, but slightly below expectations of U.S. consumer price data has sparked expectations for a slowdown in the pace of rate hikes.
These hopes have caused the U.S. dollar index to fall 5.2% in November, and is expected to hit its worst monthly performance in 12 years.
Nordea's Christensen added: "After the euro rebounded against the dollar higher in the first half of November, there were fewer dollar buyers lately."
euro held gains after ECB 1 October meeting minutes showed policy makers worried that inflation might become deeply rooted, providing reasons for further rate hikes.
Euro 5 against the US dollar closed at 1.0410 on Thursday, up about 0.14%, initially standing above the 200-day moving average of 1.0387.
pound pound 5 against the US dollar rose 0.48% on Thursday to close at 1.2112, reaching a high of 1.2153, the highest since August 15, with the 200-day moving average resistance around 1.2182. In addition to the weakening of the US dollar, the Deputy Governor of the Bank of England expressed support for further interest rate hikes, which also provided support to the pound
New York dollar against the US dollar on Thursday to close at 0.6264, with an intraday high that had hit 0.6288, a new high since August 19, with the 200-day moving average resistance around 0.6297. After the New Zealand Fed raised interest rates by 75 basis points on Wednesday, the New Zealand Fed chairman stressed on Thursday that it would raise interest rates further to provide support for the exchange rate.
USD versus yen followed the dollar trend, and the dollar fell 0.68% against the yen on Thursday, the third consecutive trading day, with a low of 138.04, and the nearly three-month low touched on November 15 supported around 137.66.
The US market closed on Thursday due to Thanksgiving, and liquidity is weaker than usual. The U.S. market was generally closed early on Friday, and overall trading is expected to remain restricted.
Important economic data and events on Friday
Institutional views
Foreign exchange Economic company TickMill: The recent decline in the US dollar gives the chance of rebounding pound
$0 The recent decline of the US dollar has played a great role in the recovery of the pound pound against the US dollar. "As some high-level investors buy pound at their September lows, more cautious investors may join the action, as prices will continue to rise, which should give pound support in the near term," analyst James Harte said in a note. The next U.S. inflation data will be key to the pound's move against the dollar, and a further cooling of inflation may prompt the Fed to raise interest rates slightly in December, while rising inflation may make the rate hikes even bigger.
Citi : Eurozone inflation is expected to drop for the first time in more than two years in November
Citi said that the November euro zone inflation data is an important data released before the ECB December meeting, and it is expected that the euro zone inflation in November will drop for the first time since mid-2020. The decline in inflation is expected to be driven by energy, but core inflation is expected to remain strong. Overall inflation in the euro zone is expected to drop from 10.6% in October to 10.3% in November. However, the economist warned that this may not be the beginning of a real decline in inflation. Germany's latest salary agreement reminds people that inflation-related news still seems to be biased towards upward.
Domingo Securities: Turkish lira may continue to fall but space is limited. The expected time for lira to fall to 27
In the case of unstable price, the Turkish lira may fall, but due to the basic intervention measures supporting the lira and the improvement of risk appetite , the decline in the short term will still be limited. The Turkish central bank decided on Thursday to cut interest rates by by 2,150 basis points to 9.0% and end the interest rate cut cycle, with the inflation-adjusted real interest rate to -75.5%. However, as interventions and a more favorable market environment offset the negative impact of real interest rates, the US dollar against the Turkish lira remained in the narrow range of fluctuating . For these reasons, TD Securities delayed the expected time for the US dollar to rise to 27 against the Turkish lira, from the initial fourth quarter of 2022 to the first quarter of 2023.
Deutsche Bank: Germany's economy will decline, but it won't collapse
Commerzbank Chief economist Joerg Kraemer said in a report that the IFO business prosperity index in November rose sharply from 84.5 in October to 86.3, indicating that companies are observing certain improvements in the economic environment. The economist believes that the improvement is due to the significant decline in the risk of natural gas supply in recent weeks, and the German government has significantly increased its bailout plan and supply shortages have eased. These signs ease concerns that the German economy will experience a deep recession like the 2008-09 financial crisis or the COVID-19 pandemic. Therefore, it continues to be expected that the German economy will experience a recession, but not a collapse.
Dutch International Bank: European currencies are unlikely to recover smoothly
Dutch International Bank economists expect that the recovery of European currencies will not be smooth as energy prices rise. The European currency is currently rebounding strongly, as lower energy prices (crude oil hit by the proposal for an EU oil price cap) and higher-than-expected PMI data have provided some support for European market sentiment before the Federal Reserve released its dovish meeting minutes. But economists still doubt whether the European currency will recover smoothly, and the agency's commodity team continues to believe that energy prices still have upside risks in the new year.
This article is from Huitong.com
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