He global dollar gives way after a strong advance, since the election of Scott Bessent like the future Secretary of the Treasury in the United States reassured the bond market about fiscal discipline, putting downward pressure on bond yields and trimming some of the currency’s advantage, while gold They fell 1% this Monday, as investors took profits after a five-session rally to a three-week high.
The return on 10-year notes declined to 4.343% from 4.412% on Friday, as the election by the president-elect donald trump of the fund manager Scott Bessent was welcomed by the debt market as an old acquaintance of Wall Street and a fiscal conservative.
However, Bessent has also openly favored a strong dollar and has supported tariffs, suggesting any currency pullback could be fleeting.
He dollar It has been on the rise for eight consecutive weeks, with many technical indicators overbought on bets that Trump’s policies will stoke inflation and further support the greenback.
“The price fixing in several US assets was pushed quite aggressively in one direction for three weeks,” said BNY’s Geoff Yu. “The markets “They probably need to take a breather when it comes to their dollar positions.”
He dollar index It was down 0.8%, at 107.22, from a two-year high of 108.09 hit on Friday. The US currency fell 0.2% against the yen, to 154.52 units, moving away from its recent maximum of 156.76. The euro gained 0.3% to $1.0452, far from the two-year low hit on Friday at $1.0332. Sterling rose 0.2% to $1.2553, after hitting a six-week low of $1.2484 on Friday.
The look at the Fed
Market participants are also awaiting the minutes of the November meeting of the Federal Open Market Committee (FOMC) of the Federal Reservethe data of the GDP (first review) and core CPI figures, all expected this week.
“Markets generally expect the Federal Reserve cut rates by 25 basis points at its next meeting on December 18, although traders have reduced their bets in recent days,” Frank Watson, market analyst at Kinesis Money, said in a note.
Traders currently see a 56% chance of another 25 basis point rate cut in December, according to CME’s Fedwatch tool.
Gold gives up due to market tranquility
He gold Spot fell 1.06% to $2,707.90 per ounce, after losing 2% earlier in the day. US gold futures fell 1.4% to $2,674.90.
In the early stages of the Asian session, gold had reached its highest level since November 6, after recording its biggest weekly rise in almost two years on Friday.
The two factors weighing on gold include profit-taking following last week’s strong rally, and the nomination of Scott Bessent as next United States Secretary of the Treasuryas some market participants see it as less negative for a trade war, said UBS analyst Giovanni Staunovo.
Gold is traditionally considered a investment safe in times of economic and political risks, while some strategists believe Bessent’s nomination was a relief, as he understands the markets and his appointment could reduce the possibility of severe tariffs on US trading partners.
Among other precious metals, silver spot fell 1.7% to $30.78 an ounce, the platinum fell 1.1% to $952.60 and the palladium fell 0.4% to $1,005.25.
Source: Ambito
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