The dollar continues to keep steadier in the new week, with a more negative risk mood overnight keeping other major currencies in check. USD/JPY was a modest mover as it climbed back above 151.00, helped by higher Treasury yields. The pair continues to keeps thereabouts, trapped in between its 100 and 200-day moving averages at 148.63 and 151.96 respectively.
For today, the antipodeans are the biggest movers with the aussie leading the path lower. That comes after the RBA softened its policy guidance stance and potentially opening the door for an earlier rate cut next year. Traders are now pricing in ~57% odds of a 25 bps rate cut in February next.
That sees AUD/USD erase gains from yesterday after the China boost, with the pair now pinned under 0.6400 and testing key support as mentioned here.
Looking to the session ahead, there won’t be much to really shake things up for broader markets. The focus now shifts towards the US CPI report tomorrow. And until then, it looks to be more of a waiting game before market players turn their attention to more central bank meetings in the week ahead.
The loonie will be in focus with the BOC set to cut rates by 50 bps tomorrow as well. USD/CAD is holding at 1.4177 currently and is eyeing a key monthly jump above 1.4100, which will mark a big technical breakout for the pair as highlighted before here.
The only notable item on the agenda in Europe is the German CPI data but even then, these are final estimates so they won’t matter.
0700 GMT – Germany November final CPI figures
1100 GMT – US November NFIB small business optimism index
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
