The USD has demonstrated significant strength, nearing a two-year high against majors. This appreciation is largely attributed to the Federal Reserve's semi-hawkish stance, indicating a slower pace of rate cuts in the upcoming year. However, the release of the core PCE data, which missed forecasts, may soften the greenback's momentum slightly. In the near term, the USD will look to find support from strong durable goods orders and housing data. Additionally, any dovish signals from the Federal Reserve in response to the weaker PCE data could shift sentiment and weigh on the USD.

The Canadian dollar struggled this week, tumbling to fresh four-year lows near 1.4400 as mounting political uncertainty and a dovish Bank of Canada weighed heavily on the currency. Calls for Prime Minister Trudeau’s resignation have only added to the pressure, overshadowing any positive economic data. Looking ahead, markets will closely watch remarks from Bank of Canada officials for clues on monetary policy direction, while fluctuations in global oil prices—critical to Canada’s exports—could further sway the CAD’s trajectory.

Expected weekly trading range: 1.418 - 1.462

The Euro saw a mixed performance this week, remaining range-bound and struggling to find clear directional momentum. Ongoing economic concerns in the Eurozone, particularly in Germany, weighed heavily on the currency. Preliminary December PMI estimates highlighted a continued contraction in Germany’s private sector, though the pace of decline showed signs of easing. Additionally, the Fed's semi-hawkish stance added to the euro's challenges. With no major data releases expected next week, the euro's trajectory will likely hinge on USD movements and broader global developments.

Expected weekly trading range: 1.478 - 1.522

The British Pound displayed resilience this week, with the GBP/CAD pair rebounding toward the 1.80 mark following solid UK jobs data. The ILO Unemployment Rate held steady at 4.3%, while annual wage inflation rose to 5.2%, signalling strong wage growth. This strength supported the Bank of England’s decision to hold interest rates, bolstering the Pound. Looking ahead, market attention will turn to upcoming UK GDP figures, which will provide critical insights into the economy's health and influence the Pound's direction.

Expected weekly trading range: 1.783 - 1.837

The Japanese yen trimmed some of last week’s losses, supported by higher-than-expected inflation data that fueled hopes for a potential rate hike by the Bank of Japan in January. While the BOJ kept rates unchanged this week, citing the need for more data on wage trends, the yen benefited from a softer USD following the Federal Reserve's recent rate cut. With the upcoming Christmas holidays likely to reduce trading volumes, the yen may see muted action in the near term.

Expected weekly trading range: 107.20 - 110.46

The Swiss Franc continued to show weakness this week after the Swiss National Bank (SNB) unexpectedly cut interest rates by 50 basis points on December 12, 2024, aiming to stimulate the economy amid global uncertainties and a stronger US dollar. As markets adjust to the new rate environment, the CHF is likely to remain under pressure, with further weakening expected if the SNB signals additional easing measures. However, its safe-haven status could offer some support in the event of geopolitical tensions or global economic instability.

Expected weekly trading range: 0.611 - 0.629

The Chinese Yuan remained relatively stable this week, after the People’s Bank of China’s (PBoC) held the loan prime rate. While robust retail sales growth and persistent property sector challenges weighed on the currency, better-than-anticipated industrial production data provided some positive momentum. Looking ahead, the PBoC's guidance will be in focus, with the yuan potentially facing pressure if further easing is introduced or US-China trade tensions escalate. However, stronger economic data could help the CNY sustain its current levels.

Expected weekly trading range: 5.00 - 5.16

The Indian Rupee hit a record low this week, slipping past 85 per USD as the Federal Reserve signalled a slower pace of rate cuts in 2025. Persistent demand for the USD and cautious market sentiment have driven the INR's decline. Adding to the pressure, the appointment of a new RBI governor has fueled expectations of a shift toward more accommodative monetary policy. Looking ahead, the INR is likely to remain under pressure as markets watch for potential Reserve Bank of India (RBI) interventions to curb volatility. Any dovish signals from the RBI could push the INR further downward.

Expected weekly trading range: 58.22 - 60.00

The Australian Dollar faced significant pressure this week, sliding to a two-year low against the USD. Factors weighing on the currency include China's economic struggles, persistent US-China trade tensions, and a dovish stance from the RBA. Although hot employment data, including a drop in the unemployment, offered some optimism, it wasn’t enough to counter market concerns. Looking ahead, the AUD may remain under pressure as markets monitor signals from the RBA and assess the global economic outlook, which continues to pose significant headwinds.

Expected weekly trading range: 0.886 - 0.913

The New Zealand Dollar faced a tough week amid weaker-than-expected Q3 GDP data that heightened expectations of further interest rate cuts by the RBNZ. Markets are now pricing in the odds of a 50 basis points cut, reflecting concerns over New Zealand's ongoing economic recession. The NZD's struggles were compounded by the strong performance of the US economy. Looking ahead, the NZD's trajectory will depend on the RBNZ's policy signals and upcoming economic data, with any indication of additional rate cuts or weak figures likely adding to its downside risks.

Expected weekly trading range: 0.798 - 0.822

The Mexican Peso demonstrated resilience this week. The currency gained strength after US PCE inflation data came in lower than expected, prompting a pullback and providing support for the MXN. Despite a 25-basis-point rate cut by the Bank of Mexico (Banxico), the peso recovered from its lows, reflecting investor confidence. Looking ahead, the MXN's performance will depend on US economic data and Federal Reserve decisions, as well as Banxico's future policy signals and updates on Mexico's inflation and growth outlook.

Expected weekly trading range: 13.76 - 14.18