24/11/2023 

US dollar update

US dollar Summary

Yesterday, the US dollar experienced a decline and is currently displaying weaker performance against certain major currencies. With no significant releases or news affecting the dollar due to the closure of US markets for Thanksgiving, concerns about potential Federal Reserve rate cuts in the coming year resurfaced, impacting the US dollar index.

The recent minutes from the US Federal Reserve’s Federal Open Market Committee meeting unveiled a cautious attitude toward future interest rate hikes. The FOMC said that additional rate increases would only be contemplated if efforts to control inflation faced setbacks. The Fed seems focused on determining the duration of maintaining the policy rate within the existing 5.25%-5.50% range, aiming to strike a balance between addressing inflation and fostering economic growth.

Although Wall Street is set to close early today, the dollar may stay active US PMI indicators are scheduled for release. Forecasts anticipate a contraction in the manufacturing index after it remained stagnant in October, and a projected slowdown is expected in the services index.

Market Views & Opinions

Citi Wealth Management at a recent FX Snapshot about the US dollar:

• “Citi Analysts characterize their near-term outlook as tactically bearish USD and DXY can stay at elevated levels between 103.5 – 107, possibly until year-end.”
• “USD strength should re-emerge next year driven by a US economy that remains relatively resilient compared to a sharper contraction in Europe.”

ING in today’s article says “It should be a relatively quiet day in FX today. We expect the dollar to keep stabilising around current levels. The next two weeks will set the tone for FX markets into Christmas, with key data (like payrolls) published in the US.”

IMPORTANT DISCLAIMER

The information in this report is of a general nature only. It is not a piece of personal financial advice. It does not take into account your objectives, financial situation, and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.