Global Market Snapshot 23rd December 2024

In the complex landscape of the global economy, the foreign exchange market is always filled with uncertainties and opportunities. This week, the main focus of the forex market revolves around five major currencies: the US Dollar, Japanese Yen, British Pound, Euro, and Canadian Dollar.

The US Dollar retreated after hitting a two-year high earlier this week but remained up on a weekly basis overall. The Federal Reserve cut interest rates by 25 basis points and indicated that rate cuts in 2025 would be smaller, which has provided some support for the Dollar. The Dollar Index fell by 0.72% to 107.64 but still recorded a weekly gain of 0.82%. Data from the US Department of Commerce showed that the Personal Consumption Expenditures (PCE) Price Index rose by 0.1% month-on-month in November and increased by 2.4% year-on-year, indicating a slowdown in inflation. The moderate rise in the Fed’s preferred inflation gauge, the PCE Price Index, along with a drop in 10-year Treasury yields, jointly influenced the Dollar’s performance.

Analysts generally expect the Dollar’s movements to be shaped by the Federal Reserve’s monetary policy and global economic conditions. If inflation continues to slow, the Fed may further cut interest rates, which could put pressure on the Dollar. At the same time, global economic uncertainties may provide safe-haven demand for the Dollar.

USDJPY pair fell after the Bank of Japan (BOJ) maintained its interest rates unchanged. Following the decision, the USD/JPY dropped to a five-month low of 156.573. The BOJ’s interest rate decision directly impacted the Yen, and the market remains attentive to potential future policy adjustments by the BOJ.

Analysts generally believe that the BOJ’s interest rate decisions provide short-term support for the Yen, but the long-term trend will depend on changes in the global economy and monetary policies. The BOJ’s policy stance will remain a key factor influencing the Yen’s performance. If the BOJ adopts a more accommodative monetary policy in the future, the Yen may face depreciation pressure. Additionally, global trade tensions and geopolitical risks could also affect the Yen.

GBPUSD The British Pound fell to a one-month low of $1.257, marking its third consecutive weekly decline. The Bank of England (BoE) kept interest rates unchanged on Thursday, which had an impact on the Pound. Additionally, UK economic data and the Brexit process remain significant factors influencing the currency.

The BoE’s interest rate decisions and the uncertainty surrounding the Brexit process are the main factors affecting the Pound’s performance. The final outcome of Brexit will continue to be a key driver for the Pound. If a Brexit agreement is successfully reached, the Pound may rebound. However, if the Brexit process continues to face delays, the Pound could come under further depreciation pressure.

EURUSD The Euro rose after initially falling to a one-month low of $1.03435 during the session, marking its third consecutive weekly decline. Comments from former U.S. President Trump impacted the Euro, as he demanded the European Union purchase more U.S. oil and gas to offset the “huge deficit” with the United States, warning of potential tariffs otherwise. The Euro’s performance will be influenced by the European Central Bank’s monetary policy and global trade conditions. If the ECB adopts a more accommodative monetary policy in the future, the Euro could face depreciation pressure. Meanwhile, an easing of global trade tensions could provide support for the Euro.

USDCAD pair fell by 0.18%. Canadian economic data and global oil price fluctuations have influenced the Canadian Dollar (CAD). Analysts generally believe that Canadian economic data and global oil price volatility are the main factors affecting the CAD’s performance. The CAD’s movement will be shaped by Canada’s economic performance and global oil prices. If the Canadian economy continues to grow steadily and global oil prices remain stable, the CAD may gain support. However, global economic uncertainties and oil price volatility could put pressure on the CAD.

BTC Bitcoin failed to regain any traction, slumping to 95,500 dollars over the weekend.