Daily Currency Update

USD - US Dollar

As the week ends and a new month begins, the US Dollar is slightly weaker against major currencies, although the Dollar Index (DXY) is stable today. Forex markets are leveling after yesterday's gains in the dollar. US Treasury yields remain unchanged, while stocks show positive trends. The dollar, despite its recent recovery, faces potential further weakness due to lower yields. The US market has a light agenda with only Construction Spending and ISM Manufacturing data due, but significant speeches from Fed Governors Goolsbee, Powell, and Cook are scheduled. These are the last Federal Reserve comments before the December 13th FOMC meeting blackout period.

CAD - Canadian Dollar

The CAD briefly hit its highest value against the USD since late September before pulling back prior to the November employment report. The report is anticipated to show a 14k job increase and a slight uptick in the unemployment rate to 5.8%, with wage growth marginally slowing to 4.9%. Despite recent improvements in inflation data, high wage growth continues to concern policymakers. Indicators such as hours worked suggest the economy may be outperforming recent GDP reports. The CAD has gained support in cross-currency trading, indicating a potential reversal of its recent downtrend. Additionally, USD/CAD risk reversals are at a three-year low, signaling improved CAD sentiment and the possibility of further gains. Observe USD/CAD trends.

EUR - Euro

The final Manufacturing PMI figures for the Eurozone were modestly adjusted upwards to 44.2 from the initial estimate of 43.8 for November. Both German and French figures saw upward revisions, and Spain posted a robust 46.3, surpassing expectations. However, Italy's outcome of 44.4 fell short of predictions. This data provided a marginal boost to the EUR earlier, but during the overnight session, the currency mostly fluctuated around the 1.09 level.

GBP - British Pound

In November, the Nationwide house price index recorded a 0.2% increase, marking its third consecutive rise. Meanwhile, the UK's Manufacturing PMI for the same month was adjusted upwards to 47.2 from an initial estimate of 46.7, reaching its highest point since spring. The GBP saw a rebound to the high 1.26s overnight before experiencing a slight decline. Given the pound's strong performance towards the end of November, further outperformance of the GBP appears probable.