Marketwatch North America

Daily Insights
December 22, 2023

The Dollar Index is -0.33% today, -1.94% during December, and -4.85% since October’s close. The dollar’s weakness has unfolded in relative orderly fashion with dollar bears pouncing on minor dollar gains as an opportunity to go short at more favorable levels. The turning point for the dollar was October’s surprise Nonfarm Payrolls figures (released on November 3rd) that were below market estimates. The payroll disappointment was followed shortly by an unexpected drop in CPI. Additional economic data points since then have signaled a clear picture of a receding U.S. economy, paving the way for the Fed’s dovish ‘pivot’ on rates at the FOMC’s December 13th rate policy announcement.

Traders are now pricing in an 85% probability of a quarter point cut at the FOMC’s March 2024 meeting, and >100% probability of cuts at the May and June meetings. The implied rate at the end of 2024 now stands at 3.73%, suggesting 1.60% in total cuts during all of next year. That’s a phenomenal shift in sentiment from only two months ago.

The USD is lower today vs. all G10 currencies, a continuation of the weekly, monthly, and quarterly trends.

U.S. Treasury yields are lower today, with the 10-year yield now at 3.8745%. Initial support is seen at 3.80%, but an eventual drop to 3.50% appears to be the technical target.

Economic Calendar

USD - Core PCE Price Index m/m
AUD - Private Sector Credit m/m
USD - Core Durable Goods Orders m/m
USD - Durable Goods Orders m/m
USD - Personal Income m/m
USD - Personal Spending m/m
USD - Revised UoM Consumer Sentiment
EUR - German Import Prices m/m
GBP - Retail Sales m/m
GBP - Current Account
GBP - Final GDP q/q
GBP - Revised Business Investment q/q
USD - New Home Sales
USD - Revised UoM Inflation Expectations
CAD - GDP m/m
EUR - Belgian NBB Business Climate
AUD - CB Leading Index m/m

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 142.557 141.859
eur/usd 0.90958 0.90576
gbp/usd 0.78868 0.78465
aud/usd 1.47632 1.46516
usd/cad 1.32926 1.32187
usd/mxn 17.0498 16.9298
Equities and Commodities
S&P 500 4769.06
NASDAQ 16829.1
DOW 37478.7
GOLD 2060.59
SILVER 24.33

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.