20/11/2024  

Market Trends: USD Strength, Euro Pressure, and Fed Policy Focus 

The U.S. Dollar Index (DXY) has shown mixed performance amid geopolitical developments and economic data releases. While the index initially surged to a yearly high of nearly 107.00 following Russian President Vladimir Putin’s statements on nuclear policy, it later eased due to profit-taking and the release of softer-than-expected U.S. housing data. October Housing Starts fell by 3.1%, while Building Permits declined by 0.6%, raising concerns about the housing market’s resilience.

Despite a pullback, the DXY remains supported by expectations of a strong U.S. economy and reduced bets on imminent Federal Reserve rate cuts. Fed Chair Jerome Powell and other officials emphasized a cautious approach, with markets now pricing a lower probability of a December rate cut. Treasury yields, which briefly spiked, remain a key driver, while technical indicators suggest potential consolidation after the index reached overbought levels.

The EUR/USD pair remains under pressure, trading below 1.0600 as geopolitical tensions, including Ukraine’s use of U.S.-supplied missiles and broader risk aversion, weigh on the Euro. The pair faces significant support at the 1.0525–1.0540 range, with further downside potential if this level breaks.

Meanwhile, global markets are assessing the implications of geopolitical shifts and the latest ECB and Fed statements, which continue to highlight inflationary risks and policy uncertainties. Traders will closely watch upcoming speeches and data releases to gauge near-term market direction.

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.