Dollar saw a modest pullback in Asian session today, easing off its sharp post-election rally as market enthusiasm stabilized. US equities, including DOW, S&P 500, and NASDAQ, all closed at record highs overnight on strong gains, with DOW particularly outperforming. Meanwhile, 10-year Treasury yield surged to a crucial Fibonacci resistance level that could prove pivotal. The focus now shifts to today’s FOMC rate decision, where Chair Jerome Powell’s stance will be closely scrutinized for indications of rate cuts, especially amid market adjustments following the election outcome. In the currency markets, Kiwi and Aussie are currently the strongest performers of the day, buoyed by improved risk sentiment. This positive mood was further supported by robust trade data from China, which reported a 12.7% yoy increase in exports for October—the fastest pace in 19 months. The surge is attributed "front-loading" shipments ahead of escalating trade tensions when Donald Trump assumes office. Sterling also showed resilience, with market focusing on BoE rate decision. There is speculation that policy easing might proceed at a slower pace than initially anticipated due to the government's new inflationary budget. Conversely, Euro is trailing behind, following the greenback as the second weakest currency for the day, with Swiss Franc not far behind. Yen sits in the middle of the pack alongside Loonie. Japan's top currency diplomat, Atsushi Mimura, expressed concern over recent sharp rise in USD/JPY, characterizing the movement as "one-sided and drastic". He indicated that the government is closely monitoring currency developments, including speculative activities, and is prepared to take necessary measures if required. However, it is unclear what possible actions Japan could implement to counter the "one-sided" strength of Dollar.... |
