Global Market Snapshot 14th October 2024

This week, the foreign exchange market has experienced relatively mild fluctuations, with the U.S. dollar remaining largely stable. In contrast, other major currencies such as the British pound, Japanese yen, and euro have shown different movements due to the impact of their respective domestic economic data and events. As central banks adjust their monetary policies and economic data is released, market sentiment has gradually shifted from expectations of aggressive interest rate hikes by the Federal Reserve to a reassessment of the economic outlooks of various countries.

The U.S. dollar remained broadly stable against major currencies this week, with the Dollar Index closing at 103.01, marking a two-month high. This movement was mainly due to adjustments in market expectations regarding the Federal Reserve’s rate cuts. The U.S. Department of Labor’s September Producer Price Index (PPI) indicated moderate inflationary pressure, while the September Consumer Price Index (CPI) came in slightly above expectations, prompting the market to reassess the Federal Reserve’s monetary policy path.

USDJPY The Japanese yen weakened against the U.S. dollar again, closing at 149.12, near the psychological level of 150. The persistent depreciation pressure on the yen mainly stems from the divergence in monetary policies between Japan and the United States. While the Federal Reserve continues to focus on controlling inflation, the Bank of Japan maintains its ultra-loose monetary policy. This widening interest rate differential between the two countries has led to the yen’s poor performance in the market.

GBPUSD The British pound performed relatively strongly this week, rising 0.08% against the U.S. dollar to close at $1.3072. This rebound was mainly driven by a recovery in the UK’s August economic data, showing signs of revival after two consecutive months of stagnation, which boosted market confidence in the pound. Data released by the UK’s Office for National Statistics showed modest economic growth in August. Although the UK economy as a whole still faces the pressures of high inflation and high interest rates, these signs of recovery injected some optimism into the market.

EURUSD The euro had a flat performance against the U.S. dollar this week, remaining stable at around $1.1093. Although there were no major economic data releases from the Eurozone this week, the French budget plan and the future policy path of the European Central Bank became focal points of market discussions. The French government unveiled its 2025 budget plan, aiming to address the growing fiscal deficit by cutting spending and raising taxes. While the budget may not be approved until December, its potential impact on the overall economic health of the Eurozone has drawn market attention.

USDCAD The Canadian dollar weakened slightly against the U.S. dollar this week, mainly due to fluctuations in oil prices. A pullback in oil prices exerted pressure on the energy-linked Canadian dollar. The USD/CAD exchange rate reflected the direct impact of oil price volatility on the Canadian dollar. With increasing expectations of a global economic slowdown, the outlook for oil demand remains uncertain, adding additional pressure on the Canadian dollar. In the short term, Canada’s economy will continue to rely on the performance of the energy market, and weakening global demand could further affect the Canadian dollar’s performance.

BTC Bitcoin rebounded by over 5%, reaching the $64,000 level, halting a four-day losing streak.