Daily Currency Update

USD - US Dollar

U.S. markets are reopening today after Thanksgiving for a half-day session with expected low volumes. Key data including the U.S. S&P PMIs will be released, though it might not significantly impact the dollar due to the low volume. Current market focus includes developments in the oil market, the Israel-Hamas ceasefire, and news about the Chinese real estate sector. OPEC+ has postponed its meeting, affecting crude oil prices. In China, the government is reportedly planning to support the real estate sector by allowing banks to issue unsecured short-term loans to developers, indicating concern over the ongoing crisis. The FX market is expected to be quiet today, with the dollar stabilizing at current levels. The upcoming two weeks, featuring significant data releases like U.S. payrolls, will be crucial in setting the tone for the FX markets as Christmas approaches.

CAD - Canadian Dollar

The CAD is currently trading within a narrow range between 1.3680 and 1.3720. Today lacks significant domestic data releases, and with U.S. markets operating for only a half-day session, trading volumes are anticipated to be low, leading to subdued currency movements. Like the USD, the upcoming two weeks will be crucial in shaping the CAD's direction as the year ends. In the short term, trading is expected to be stable and uneventful within this range. Observe USD/CAD trends.

EUR - Euro

Yesterday's PMIs in the eurozone showed a rebound, suggesting an improvement in economic sentiment despite manufacturing and services indicators still being contractionary. Today's IFO release will provide more insight into Germany, the eurozone's largest economy. ECB President Christine Lagarde is also scheduled to speak. This optimistic shift may positively impact the EUR/USD pair, but it's uncertain if it will support the currency pair in the near term. The expectation is for stabilization around the 1.0900 level.

GBP - British Pound

The GBP remains strong after a notable week in the UK, bolstered by the Treasury's tax cuts, which are seen as positive for the currency due to their pro-growth and pro-inflation nature. These cuts have not significantly disturbed the bond market, unlike previous announcements under former Prime Minister Liz Truss. PMIs also exceeded expectations, with services and composite indices surpassing the 50.0 mark. The market has adjusted its expectations, reducing around 20 basis points in the September 2024 contract over the past week. The GBP is expected to maintain its momentum in the medium term.