Here’s what you need to know to trade today Friday December 1:
Risk sentiment remains tepid on Friday, as Asian stock markets traded mostly lower despite Wall Street’s recovery the previous day. He China’s Caixin manufacturing PMI unexpectedly rose to 50.7 in November, but failed to impress markets as factory activity in other key Asian regions remained sluggish due to weak global demand.
US S&P 500 index futures remain subdued as investors weigh expectations of an interest rate cut by the US Federal Reserve (Fed). Thursday, The US core Personal Consumption Expenditure (PCE) Price Index increased at a rate of 3.0% year-on-year in October, cooling after a three-month streak of 3.4% readings. On a monthly basis, core PCE inflation recorded no growth in the reported month, below the forecast of a 0.1% increase and below the 0.4% recorded in September.
New York Fed President John Williams said Thursday that “balancing the risks of too high inflation and a weaker economy, and based on what I know now, my assessment is that we are at or near the top of the federal funds rate target range“.
Falling inflation in the US reinforced the Fed’s dovish expectations, while dovish comments from Fed officials also played a role. The dollar has returned to the red zone along with US Treasury yields, breaking the previous bounce driven by late-month short covering.
Markets continue to value the possibility of a rate cut in March next year at 48%, compared to 22% seen last week, according to the CME Group’s FedWatch tool on Friday.
At the time of writing these lines, the US Dollar Index DXY remains lower near 103.30, consolidating weekly losses, while US 10-year Treasury yields lick their wounds near 4.33%.
Quote of the US dollar today
The following table shows the percentage change of the United States Dollar (USD) against major currencies.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.12% | -0.05% | -0.08% | 0.03% | 0.11% | 0.03% | -0.05% | |
| EUR | 0.12% | 0.05% | 0.03% | 0.14% | 0.21% | 0.14% | 0.07% | |
| GBP | 0.05% | -0.06% | -0.03% | 0.09% | 0.16% | 0.08% | 0.01% | |
| CAD | 0.09% | -0.02% | 0.04% | 0.12% | 0.19% | 0.11% | 0.05% | |
| AUD | -0.03% | -0.15% | -0.09% | -0.11% | 0.07% | 0.00% | -0.08% | |
| JPY | -0.11% | -0.19% | -0.17% | -0.20% | -0.05% | -0.06% | -0.14% | |
| NZD | -0.03% | -0.14% | -0.08% | -0.11% | 0.00% | 0.08% | -0.08% | |
| CHF | 0.04% | -0.07% | -0.01% | -0.04% | 0.08% | 0.15% | 0.07% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the euro in the left column and scroll down the horizontal line to the Japanese yen, the percentage change in the box will represent EUR (base)/JPY (quote).
All eyes are now focused on the double appearance of the president of the Fed, Jerome Powell, later during the American session. Powell will speak at 16:00 GMT and 19:00 GMT at two separate events hosted by Spelman College in Georgia. His words will be analyzed closely in search of new clues about the path to follow by the central bank regarding interest rates. It will be Powell’s last public appearance before the monetary policy meeting on December 12-13. The Fed enters its “silence period” on Saturday.
In addition, during the American session the data of the ISM Manufacturing PMIwhich will provide a new boost to the Dollar.
Most major currencies are supported by the renewed dollar weakness. The Euro (EUR) appears to be the strongest heading into the European session. The pair EUR/USD maintains its recovery momentum above 1.0900, having hit six-day lows at 1.0879 on Wednesday, after expectations for an interest rate cut by the European Central Bank (ECB) increased after weaker inflation data in the euro zone. The Eurozone manufacturing PMI will be published later, before the speech of Christine Lagardepresident of the ECB.
He GBP/USD is bouncing towards 1.2650, finding support amid hawkish comments from the Bank of England. BoE dissident Megan Greene said on Thursday: “…policy may have to be tight for a long period of time to return inflation to 2% in the medium term.” Final S&P Global manufacturing PMI data from the UK is awaited, but is unlikely to impact the British pound.
Antipodean currencies find no inspiration in China’s strong Caixin PMI data and broad-based US Dollar weakness as markets remain cautious. He AUD/USD is challenging the 0.6600 level, reversing an initial advance to 0.6630, while the NZD/USD it is flat near 0.6150.
The Japanese Yen is partially reversing its weekly gain against the US Dollar, while the USD/JPY has broken above the 148.00 level again. He USD/CAD licking its wounds near 1.3550, awaiting Canadian employment data.
He WTI recovers ground and approaches $76 after disappointment over the OPEC+ decision. Saudi Arabia, Russia and other OPEC+ members agreed to voluntary production cuts for the first quarter of 2024. However, Angola rejected a new production quota that the alliance had assigned it.
The price of Gold is heading back towards $2,050, supported by dovish expectations from the Fed.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
