The market suggests about a 23% chance that the Fed will begin cutting interest rates as early as March, according to CME’s FedWatch tool.
He dollar American is starting the last week of November with a downward trend, heading towards its biggest monthly drop in a year. Traders are awaiting new economic signals over the next week to elucidate the possible direction of the interest rates officers.
This week presents a packed calendar, with key events such as the postponed OPEC+ meeting, the release of the Federal Reserve’s preferred inflation index and consumer price data in the Euro zone. In addition, Chinese PMI data will be released, adding more elements to the global market perspective.
The dollar index, which evaluates its performance against a basket of six currenciesregisters a fall of 0.2%, standing at 103.22heading towards a monthly loss of more than 3%, its worst result in a year.
Dollar: the data observed by the market
Colin Asher, chief economist at Mizuho Bank, notes: “Expectations are that US rates have peaked, suggesting the time has come to move away from the dollarAsher adds that the continued rally in US stocks for four consecutive weeks is also impacting safe-haven demand for the dollar.
The operators, returning after the Thanksgiving Day, speculate that US rates may have peaked and are keeping an eye on when the first rate cuts might come. This week’s release of US core PCE prices could provide more clues about the Fed’s next steps.
Market probabilities suggest approximately a 23% chance that the Fed starts cutting interest rates already in March, according to CME’s FedWatch tool.
In other currencies, sterling shows strength against dollar, hitting a more than two-month high of $1.2627, extending its gains from last week. This monthly advance of 3.8% represents its largest increase since November of last year.
In the Asian market, the Chinese yuan experiences a decline after the official midpoint interrupted five consecutive strengthening sessions, placing the yuan in local markets at 7.1518 units per dollar. Meanwhile, its offshore counterpart also shows a decrease of 0.1%, to 7.1579 units per dollar.
Source: Ambito
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