Dollar Extends Winning Streak
London: 3 January 2024 (TraderMade): The US Dollar extended its winning streak for the second straight day, basking in the warm glow of rising Treasury yields and a skittish Wall Street.
Current status against significant currencies
- The EURUSD pair declined by 0.23% to 1.09163 at about 02:18 PM GMT.
- Similarly, AUDUSD dipped by 0.71% to 0.67129
- GBPUSD rose by 0.033% to 1.26228
- USDJPY grew by 0.81% to 143.14099
US data release crucial
Market participants hold their breath while anticipating key US data releases later today, including the coveted Fed minutes and economic indicators. These data points could serve as rocket fuel, further propelling the dollar's upward trajectory.
Fed Minutes: At 07:00 PM GMT, all eyes will be glued to the Fed's December meeting minutes. The oracle speaks! Investors hang on every word for clues about rate cuts - will their hopes blossom or fade?
Risk aversion reigns supreme
With Japanese markets closed for a holiday and global sentiment firmly rooted in risk-off mode, major indices like the S&P 500 and Nasdaq tumbled like leaves in a November breeze. This cautious mood and the soaring yields of US Treasury bonds made the dollar an even more attractive safe haven, drawing investors like moths to a flame.
Dollar Index Flexes Its Muscle
The dollar index, the muscle meter of the Greenback against a basket of its major rivals, flexed its biceps with a 0.22% gain, adding to Tuesday's hefty increase. The Euro (feeling the burn of the dollar's dominance) slumped to $1.092, marking its lowest level since December 19th, as if reliving the pre-holiday blues.
Job Openings and Manufacturing: The Crystal Ball
Aside from the Fed's oracle-like whispers, another set of critical data points awaits- US job openings for November and a survey-based gauge of the manufacturing sector. These metrics, akin to peering into a crystal ball, could offer valuable insights into the health of the US economy, potentially influencing the dollar's future dance moves.
Geopolitical Jitters Add Spice
In the background, the simmering pot of geopolitical tensions adds a spicy flavor to the market mix. The recent killing of a Hamas leader in Lebanon throws a pinch of uncertainty into the air, potentially contributing to the cautious market mood.
Overall
The US dollar stands poised for continued ascent, fueled by various factors. Rising Treasury yields, a risk-off market, looming Fed pronouncements, and the crystal ball-like economic data - all contribute to the dollar's winning streak today. The coming hours promise to be a thrilling race, with the dollar as the frontrunner and investors glued to their screens, cheering (or lamenting) its every move.
