Daily analysis 09/18/2024

18. 9. 2024 - Josef Brynda

Latest news

• Markets anticipate a Fed rate cut, with a 65% probability of a 50 basis point reduction. This decision will significantly impact the US dollar and other currencies.
• The dollar has made modest gains due to better-than-expected retail sales and short-term covering ahead of the Fed decision. This dollar strength affects its relationship with other currencies.
• The yen was the weakest among major currencies due to rising US bond yields. Attention is focused on the Fed's decision and its potential impact on the yen.
• The pound has weakened, awaiting today's inflation data release. The persistence of inflation in services will be a key factor for the Bank of England's monetary policy easing pace.
• The Kiwi dollar has also weakened, awaiting the release of Q4 GDP, which could signal a recession. This data may significantly influence the New Zealand dollar's exchange rate.
• The Aussie recorded slight gains despite US dollar strength. This shows some resilience of the Australian currency against global trends.
• Inflation in Canada fell into negative territory in August, creating a strong argument for a 50 basis point rate cut by the Bank of Canada in October. This could have a significant impact on the Canadian dollar.
• Investor confidence in Germany fell to its lowest level in almost a year, signaling a risk of a hard landing for the German economy. This situation may affect the euro given Germany's importance in the eurozone.
• Traders have reduced expectations for aggressive rate cuts by the ECB for 2024 by 7 basis points. This may influence the future development of the euro.
• Better-than-expected US retail sales supported the dollar. US economic data will continue to be a key factor influencing forex markets.
• Japan's trade balance narrowed less than expected in August, which may affect the yen. Imports and exports lagged behind expectations.
• Gold and oil prices affect currencies of countries dependent on exporting these commodities. Gold fell due to profit-taking, while oil focuses on inventories and Middle East tensions.
• Increased volatility, measured by the VIX index, can affect risk currencies. The VIX rose 2.74% to 17.61, signaling increased market uncertainty.
• Bond markets are pricing in aggressive rate cuts of 250 basis points during the cycle, which would only be necessary in case of a full-fledged recession. This expectation may influence safe havens like the Swiss franc or Japanese yen.
• Reports of Israeli explosives in Hezbollah pagers may increase geopolitical tensions. Such events often lead to strengthening of safe-haven currencies.
• Microsoft and Blackrock's plans for a $30 billion AI infrastructure fund may affect currencies of countries with strong tech sectors, such as the US or South Korea.
• Final eurozone inflation data will be released today. It's expected to remain at 2.2%, which may influence the euro and ECB monetary policy.
• Today's US housing starts data may influence the dollar. An increase to 1318k from the previous 1238k is expected.
• Results from companies like General Mills can influence market sentiment and indirectly currency exchange rates. Attention is focused on company revenues and debt levels.
• Historically, only 3 out of 20 rate-cutting cycles since 1957 ended with negative stock returns in the following 24 months. This trend may influence investors' risk appetite and thus currency exchange rates.
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News summary

• The forex market is on edge as the Federal Reserve's rate decision looms, with a 65% probability of a 50 basis point cut. Gains for the US dollar, supported by better-than-expected retail sales data at tuesday. The decision will likely cause significant volatility across major currency pairs, potentially weakening the dollar if a larger cut is implemented, or strengthening it if the Fed maintains a more hawkish stance than expected.
• The Japanese yen has weakened considerably due to rising US bond yields and a less-than-expected narrowing of Japan's trade balance. Meanwhile, the New Zealand dollar awaits Q4 GDP data that could signal a recession. These developments highlight the vulnerability of Asian currencies to both domestic economic performance and US monetary policy. In the coming weeks, we may see increased volatility in Asian currency pairs, with potential for further weakening against the dollar if economic data continues to disappoint.
• The euro faces headwinds as German investor confidence plummets to its lowest level in nearly a year, signaling recession risks for Europe's largest economy. Simultaneously, traders have reduced expectations for aggressive ECB rate cuts in 2024. The British pound has also weakened ahead of crucial inflation data. These factors suggest potential weakness for European currencies in the near term, especially if inflation data surprises to the upside or if economic indicators continue to deteriorate.
• While the US dollar strengthens on positive retail sales data, the Canadian dollar faces pressure due to inflation falling into negative territory in August. This divergence in economic performance could lead to interesting dynamics in the USD/CAD pair, with the potential for Canadian dollar weakness if the Bank of Canada implements expected rate cuts. However, the long-term trajectory will depend on how quickly inflation rebounds in Canada and the pace of economic growth in both countries.
• Gold prices have fallen due to profit-taking, while oil markets focus on inventories and Middle East tensions. These movements in commodity prices can significantly impact currencies of resource-exporting nations. Additionally, increased geopolitical tensions, such as reports of Israeli actions against Hezbollah, may strengthen safe-haven currencies like the Swiss franc and Japanese yen. In the coming months, commodity currencies may experience heightened volatility as markets balance economic data with geopolitical risks.
• Microsoft and Blackrock's plans for a $30 billion AI infrastructure fund could have far-reaching effects on currencies of countries with strong tech sectors, such as the US and South Korea. This development may provide long-term support for the US dollar and Korean won, as increased investment in AI could boost economic growth and attract foreign capital. However, the impact may take time to materialize and will depend on the success and implementation of such initiatives.
• Historical data shows that only 3 out of 20 rate-cutting cycles since 1957 ended with negative stock returns in the following 24 months. This trend suggests that despite current economic uncertainties, there's potential for a positive market outlook once rate cuts begin. For forex markets, this could mean a gradual shift towards risk-on sentiment, potentially benefiting currencies of emerging markets and countries with strong growth prospects. However, the path to this outcome may be volatile, and much will depend on the pace and extent of rate cuts, as well as global economic recovery patterns.

Daily analysis 09/17/2024

17. 9. 2024 - Josef Brynda

Latest news

• The US dollar is trading near its year-to-date lows as markets anticipate potential rate cuts from the Federal Reserve.
• Speculation about a 50 basis point rate cut from the Fed is increasing, which could significantly impact the dollar's value.
• Activity currencies like the New Zealand dollar, Australian dollar, and British pound gained against the US dollar.
• The Canadian dollar weakened due to expectations of a larger rate cut from the Bank of Canada.
• The Japanese yen reached its highest levels in a year, with USD/JPY briefly trading below 140.
• Market focus is on the upcoming US retail sales data and the Federal Reserve's interest rate decision.
• Economic data releases, including US retail sales, Canadian CPI, and the German ZEW survey, are likely to influence forex markets.
• Volatility remains relatively low, but uncertainty surrounding the Fed's rate decision is keeping markets cautious.
• The DXY index trades close to its year-to-date lows that were printed in August.
• Expectations for the European Central Bank's rate cuts are also influencing currency movements, with around 37.5bps of cuts priced in by the end of the year.
• Oil prices trading near a one-week high could impact commodity-linked currencies.
• Gold holding steady near a record high may affect safe-haven currencies.
• The upcoming FOMC meeting tomorrow is a key event that could cause significant forex market movements.
• The Bank of Japan's decision this week is another important factor for the yen and broader Asian currencies.
• Copper's rise and speculation about Chinese economic support could influence the Australian dollar and other commodity currencies.
• European gas prices slumping to a six-week low may impact the euro and other European currencies.
• The NY Fed Empire manufacturing data came in better-than-expected, potentially supporting the dollar.
• Traders have priced in around 118bps in cuts for the rest of the year from the Fed, which could affect dollar strength.
• ECB Chief Economist Philip Lane's comments reinforced the idea of a rate cut in December rather than October, potentially impacting the euro.
• The overall risk-on sentiment in the market could lead to weakness in safe-haven currencies and strength in riskier, high-yielding currencies.

News summary

• The US dollar is trading near its year-to-date lows as markets increasingly expect rate cuts from the Federal Reserve. Speculation about a potential 50 basis point cut is growing, which could substantially weaken the dollar. The DXY index is hovering close to its August lows, reflecting this bearish sentiment. With approximately 118 basis points of cuts priced in for the rest of the year, the dollar may continue to face downward pressure against major currencies.
• Currencies associated with higher-risk appetites and economic activity, such as the New Zealand dollar, Australian dollar, and British pound, have gained ground against the weakening US dollar. The rise in copper prices and speculation about Chinese economic support could further boost the Australian dollar and other commodity-linked currencies. However, the Canadian dollar has weakened due to expectations of a larger rate cut from the Bank of Canada.
• The euro's movements are being influenced by expectations of rate cuts from the European Central Bank, with about 37.5 basis points of cuts priced in by year-end. ECB Chief Economist Philip Lane's comments suggesting a rate cut in December rather than October could provide some near-term support for the euro. The slump in European gas prices to a six-week low may also impact the euro and other European currencies, potentially weakening them against currencies from regions with more robust energy markets.
• Market focus is on several key events and data releases that could cause significant forex market movements. These include US retail sales data, the Federal Reserve's interest rate decision, Canadian CPI, the German ZEW survey, and the Bank of Japan's policy decision. The FOMC meeting tomorrow is particularly crucial and could trigger substantial currency fluctuations depending on the Fed's stance and forward guidance.
• While overall volatility remains relatively low, uncertainty surrounding the Fed's rate decision is keeping markets cautious. The general risk-on sentiment could lead to continued strength in higher-yielding, riskier currencies at the expense of safe-haven options. However, this sentiment could quickly shift based on the outcomes of the upcoming central bank meetings and economic data releases.
• Based on these factors, we might expect to see continued weakness in USD pairs, particularly against activity currencies like AUD/USD, NZD/USD, and GBP/USD. The EUR/USD could see some volatility but may find support if the ECB maintains a less dovish stance than the Fed. USD/JPY could continue its downward trend, especially if the Bank of Japan signals any shift away from its ultra-loose monetary policy. Commodity currencies may outperform, with potential gains in AUD/USD and NZD/USD, while USD/CAD could see some upward pressure due to expectations of larger rate cuts in Canada.

Graphs

9. 9. 2024 - Josef Brynda

USD Performence                                                              Consumer price index

Policy rate decisions since the pandemic

Daily analysis 09/9/2024

9. 9. 2024 - Josef Brynda

Latest news

• The US dollar ended last week choppily, as the jobs report failed to resolve the debate about the pace of Fed easing.
• Australian dollar weakness was driven by lower commodity prices, especially the continued decline in iron ore prices.
• Other commodity currencies such as the New Zealand dollar, Norwegian krone, and Canadian dollar also underperformed.
• Safe havens like the Swiss franc closed the week in gains.
• The Canadian dollar was also weighed down by disappointing Canadian jobs data, where unemployment rose more than expected.
• The euro closed the week higher despite Friday losses, with the ECB meeting being the key event to watch this week.
• The mixed US jobs report for August showed lower-than-expected job growth but also a lower unemployment rate.
• The debate between a 25 or 50 basis point cut at the Fed's next meeting remained unresolved.
• The market is still pricing in 34 basis points of rate cuts for next week's Fed meeting.
• Attention now turns to CPI data to be released this week.
• Fed Governor Waller stated he would advocate for front-loading rate cuts if appropriate.
• Japan's Q2 GDP came in weaker than expected, with annual growth of 2.9% versus the expected 3.2%.
• China's broader CPI inflation rose 0.6% year-on-year in August, missing expectations.
• European and US equity futures signal a modest rebound following last week's selloff.
• Uncertainty remains in the US Treasury market about the size of potential Fed rate cuts.
• Traders are now pricing in 30 basis points of cuts for the September meeting, 70 basis points by November, and 112 basis points by year-end for the FED.
• European sovereign bonds strengthened, following trading momentum in the US.
• The European Central Bank is expected to cut rates by 25 basis points to 3.5%.
• Oil trades firmer after closing at its lowest level since June 2023 on Friday.
• Gold traded lower on Friday after failing to reach a new record following the US jobs report.

News summary

• The US dollar ended last week with choppy trading as the August jobs report failed to provide clear direction on the Federal Reserve's easing pace. The mixed report showed lower-than-expected job growth but a lower unemployment rate, leaving the debate between a 25 or 50 basis point cut at the Fed's next meeting unresolved. This uncertainty is likely to keep the dollar volatile in the near term, with traders closely watching upcoming CPI data for further clues.
• Commodity currencies faced pressure, with the Australian dollar weakening due to lower commodity prices, particularly the continued decline in iron ore. The New Zealand dollar, Norwegian krone, and Canadian dollar also underperformed. The Canadian dollar was further weighed down by disappointing domestic jobs data. This trend could continue if global growth concerns persist, potentially benefiting safe-haven currencies like the US dollar and Swiss franc against these commodity-linked currencies.
• The euro closed the week higher despite Friday losses, with the upcoming European Central Bank (ECB) meeting being a key event to watch. The ECB is expected to cut rates by 25 basis points to 3.5%, which could impact the euro's performance against major currencies, particularly the US dollar. Traders will be closely monitoring the ECB's decision and subsequent commentary for indications of future monetary policy direction.
• In Asia, Japan's Q2 GDP came in weaker than expected, while China's CPI inflation missed expectations. These economic indicators suggest potential weakness in these major economies, which could influence trading patterns in Asian currencies, particularly the Japanese yen and Chinese yuan, against other major currencies.
• The forex market is pricing in significant rate cuts by the Federal Reserve, with expectations of 30 basis points of cuts for the September meeting, 70 basis points by November, and 112 basis points by year-end. This aggressive pricing could lead to increased volatility in dollar pairs if actual Fed decisions or economic data deviate from these expectations.
• Overall, the forex market is likely to remain sensitive to economic data releases, central bank decisions, and shifts in risk sentiment. Traders should be prepared for potential volatility, especially in USD pairs, commodity currencies, and the euro as markets digest new information and adjust expectations for monetary policy paths in major economies.

Dollar eases as US job openings fall; safe-haven bid lifts yen

5. 9. 2024 - Josef Brynda

The dollar slipped against most major currencies on Wednesday after July U.S. job openings data signaled a softening labor market, tilting the odds further in favor of larger interest rate cuts by the Federal Reserve.

Traders boosted bets that the Fed will deliver a half-a-percentage-point reduction at its next meeting, following news that job openings in July fell to the lowest level in 3-1/2 years.

Friday's U.S. payrolls report could offer further clues on the timing and pace of Fed rate cuts.

"The U.S. central bank must not keep interest rates too high much longer or it risks causing too much harm to employment, Atlanta Federal Reserve President Raphael Bostic said on Wednesday.

The dollar index, which measures the U.S. currency's strength against six major peers, was down 0.3% at 101.4. The dollar slipped 1% to 144.07 yen, a one-week low, as global financial markets generally avoided riskier assets.

Daily analysis 09/5/2024

5. 9. 2024 - Josef Brynda

Latest news

• Equity markets remain quiet ahead of critical US jobs reports. US stocks declined slightly by 0.2% yesterday after attempting a rebound. Futures indicate a slightly lower opening in Europe and the US.
• Safe haven currencies such as the Japanese yen and Swiss franc are currently in demand. The yen strengthened by 1.2% against the US dollar and 1% against the New Zealand and Australian dollars. The euro failed to break above the 1.10 level against the dollar.
• Oil prices have stabilized after a previous decline due to weak demand. Iron ore fell to its lowest level since 2022, signaling weakness in the Chinese economy. Gold returned to the $2,500 level after maintaining support at $2,470.
• US Treasury yields dropped following the release of weaker job openings data. The 10-year yield fell by 7 basis points to 3.76%. European sovereign bonds also rallied in response to weaker US employment data.
• The JOLTS job openings for July fell to 7.673 million, the lowest level since early 2021. This decline suggests a cooling labor market. The market is now pricing in a possible 50 basis point Fed rate cut in September.
• The Bank of Canada cut interest rates by 25 basis points to 4.25%, marking its third consecutive cut. The market fully prices in 50 basis points of easing by year-end, implying two 25 basis point cuts in October and December.
• Japan's July wage report strengthened the case for further rate hikes by the Bank of Japan. Cash earnings rose 3.6% year-over-year, higher than expected. After adjusting for inflation, wage growth slowed to 0.4% year-over-year.
• German factory orders unexpectedly rose for the second consecutive month, providing rare good news for the country's important manufacturing sector. Demand in July increased by 2.9% from June, against expectations of a 1.7% drop. The increase was due to large-scale orders.
• Important macroeconomic events include the release of UK Construction PMI, Eurozone Retail Sales, and US ADP Employment Change. The US ISM Services Index and weekly reports on oil and fuel inventories are also expected.
• Dollar Tree saw its shares drop 22.2% following worse-than-expected results. Today's focus is on Broadcom's earnings, with analysts expecting a strong quarter with revenue growth of 47% year-over-year.
• The VIX index rose 2.90% to 21.32, signaling increased caution in the market. VIX1D and VIX9D also saw increases, reflecting ongoing uncertainty in the short term. With expected economic reports today, there's a good chance of increased volatility.
• Based on options pricing, the S&P 500 could move up or down by about 42 points (approximately 0.76%). The Nasdaq 100 could move around 202 points (about 1.07%). These expected movements suggest potential for significant market swings.
• Traders now anticipate 61 basis points of ECB rate cuts by year-end and 166 basis points by 2025. For the Bank of England, 43 basis points of cuts are expected by year-end and 136 basis points by the end of 2024.
• The decline in oil prices due to weak demand has paused, with expectations that OPEC+ will delay October supply increases. Key support and resistance levels are now at $75 per barrel for Brent crude and $71.70 for WTI.
• Wheat traded higher for the sixth session in a row after recently hitting four-year lows. Support is provided by the outlook for a poor harvest in Western Europe, leading to short covering in US wheat futures

News summary

• Financial markets are experiencing a period of caution and volatility ahead of critical US jobs reports. Equity markets remain quiet, with US stocks slightly declining and futures indicating lower openings in Europe and the US. Safe-haven currencies like the Japanese yen and Swiss franc are in high demand, with the yen strengthening significantly against major currencies. The euro has failed to break above the 1.10 level against the dollar, despite overall dollar weakness.
• Commodity markets are sending mixed signals. Oil prices have stabilized after a previous decline due to weak demand, with expectations that OPEC+ might delay supply increases. Iron ore has fallen to its lowest level since 2022, signaling weakness in the Chinese economy. Gold has returned to the $2,500 level after maintaining support at $2,470. These movements are impacting commodity-linked currencies and reflecting broader economic concerns.
• Bond markets have rallied in response to weaker US employment data. US Treasury yields dropped following the release of softer job openings data, with the 10-year yield falling by 7 basis points to 3.76%. European sovereign bonds also gained. This trend has led to increased expectations of potential rate cuts by major central banks, including the Federal Reserve, European Central Bank, and Bank of England.
• Economic data releases are shaping market sentiment. The JOLTS job openings for July fell to 7.673 million, the lowest level since early 2021, suggesting a cooling labor market. This has led to speculation about a possible 50 basis point Fed rate cut in September. Meanwhile, the Bank of Canada cut interest rates by 25 basis points to 4.25%, its third consecutive cut. In contrast, Japan's July wage report strengthened the case for further rate hikes by the Bank of Japan.
• Market volatility remains elevated, with the VIX index rising to 21.32. Options pricing suggests potential significant market swings for major indices. Important macroeconomic events on the horizon include the release of UK Construction PMI, Eurozone Retail Sales, US ADP Employment Change, and the US ISM Services Index. These events, along with upcoming corporate earnings reports, are likely to drive further market movements and currency fluctuations.
• Currency markets are reflecting these broader economic trends and uncertainties. The US dollar has shown some weakness following the softer employment data. Activity currencies like the Australian dollar, New Zealand dollar, and British pound are underperforming due to growing concerns about economic risks. Traders are now anticipating significant rate cuts from the ECB and Bank of England by the end of 2024, which could put pressure on the euro and pound sterling. Overall, the forex market remains highly sensitive to economic data releases and central bank policy expectations.

Daily analysis 09/4/2024

4. 9. 2024 - Josef Brynda

Latest news

• Economic growth is slowing, but recession risks remain low. GDP growth is forecasted at 2.5% for 2024 and 1.5% for 2025.
• Potential output continues to grow at a brisk pace, supported by increases in labor supply, solid productivity growth, and fiscal policy-driven demand for manufacturing investments.
• The current low savings rate indicates that consumers' buffers remain weak.
• Slow monetary policy pass-through and a high share of fixed-rate mortgages suggest that rate cuts will not provide a rapid boost to economic growth.
• Inflation forecasts have been adjusted modestly lower, with headline inflation expected to average 2.9% in 2024 and 2.2% in 2025.
• The Federal Reserve is now expected to cut interest rates by 25bp at every meeting from September until June 2025, followed by two final cuts in H2 2025.
• Labor market conditions have cooled faster than expected, but mostly due to a rapidly growing labor force.
• US consumers' savings rates have remained low throughout the post-pandemic period, unlike some European economies.
• Investment growth has slowed down as tight monetary policy impacts businesses' expansion plans.
• Fiscal policy stance is expected to remain expansionary over the coming years, irrespective of the election outcome.
• Potential corporate tax hikes under a Harris administration or extended tax cuts under a Trump administration could have different impacts on economic growth.
• The risk of unsustainable debt dynamics is seen as higher in the case of a Trump victory.
• Strong labor productivity growth has continued to alleviate firms' cost pressures.
• The Fed is expected to cut rates faster than the ECB, reflecting expectations of continuous growth in the US economy's productive capacity.
• Financial conditions have already eased in the markets due to expectations of rapid rate cuts.
• The slow monetary policy pass-through means that the boost to growth will come with a lengthy delay.
• 95% of US mortgages are locked into fixed interest rates, limiting the immediate impact of rate changes on the housing market.
• The Fed prefers a gradual easing cycle, despite market speculation about 50bp cuts.
• The lack of similar slack in the euro area compared to the US economy could lead to divergent monetary policies.
• The continuous growth in the US economy's productive capacity contrasts with the situation in the euro area.
• Futures markets anticipate interest rates will decline to 3.75% by the end of the year.
• Inflation is trending down towards the central bank's 2.0% midpoint target.
• The unemployment rate has been steadily rising over the past year, stabilizing at 6.4%.
• GDP rose at an annualized rate of 2.1% in the second quarter, but growth was driven by potentially transient factors.
• Monthly GDP readings for July displayed stagnation at the start of the third quarter.
• Canada is more sensitive to global trade and housing risks than the US
• Nvidia led a tech sell-off, dropping 9.5%.
• The Australian dollar fell 2% against the Japanese yen in risk-off trading.
• Oil prices fell more than 4% due to muted demand.
• The 10-year Treasury yield had its biggest drop since August 2, ending a five-day rise.
• Key economic data includes Bank of Canada decision, Australia GDP, and US JOLTS job openings.
• US ISM Manufacturing PMI for August rose to 47.2, below expectations.
• Bank of Canada is expected to cut rates by 25 basis points, with a 20% chance of a 50bps cut.
• US stocks had their worst day since August 5, with the S&P 500 dropping 2.1%.
• Treasury futures surged sharply during the early U.S. session.
• Gold dipped 0.26%, while silver fell 1.7%.
• WTI crude futures dropped 4.36%, and Brent fell 4.86% to the lowest since January.
• The US dollar continued to strengthen from its late-August lows.
• The Canadian dollar could be vulnerable due to potential BoC rate cut and weak oil prices.

News summary

• The global economic landscape shows signs of slowing growth, with the US GDP forecasted at 2.5% for 2024 and 1.5% for 2025. Despite this, recession risks remain low. The Federal Reserve is expected to initiate a rate-cutting cycle, with 25bp cuts anticipated at every meeting from September until June 2025. Similarly, the Bank of Canada is likely to cut rates by 25 basis points, with a 20% chance of a 50bps cut. These dovish stances from major central banks could lead to weakness in the USD and CAD in the medium term. However, the Fed's faster rate-cutting pace compared to the ECB might cause the EUR/USD pair to trend lower over time.
• Inflation forecasts have been adjusted lower, with US headline inflation expected to average 2.9% in 2024 and 2.2% in 2025. Labor market conditions have cooled faster than expected, primarily due to a rapidly growing labor force. The US unemployment rate has stabilized at 6.4%, while Canada's rate is expected to tick up to 6.5%. These trends suggest potential pressure on both the USD and CAD, as softer labor markets and declining inflation could reinforce expectations of monetary easing
• Recent market movements indicate a risk-off sentiment. US stocks experienced their worst day since August 5, with the S&P 500 dropping 2.1%. Nvidia led a tech sell-off, plunging 9.5%. In the forex market, the Australian dollar fell 2% against the Japanese yen, reflecting this risk aversion. Such market conditions typically benefit safe-haven currencies like the JPY and CHF, while putting pressure on risk-sensitive currencies like the AUD and emerging market currencies
• Oil prices fell more than 4% due to muted demand, with WTI crude futures dropping 4.36% and Brent falling 4.86% to the lowest since January. This decline in oil prices could negatively impact oil-exporting currencies such as the CAD, NOK, and RUB. Gold dipped 0.26%, while silver fell 1.7%, which might have a modest impact on gold-sensitive currencies like the AUD.
• The continuous growth in the US economy's productive capacity contrasts with the situation in the euro area. This divergence, coupled with different monetary policy trajectories, could lead to significant movements in the EUR/USD pair over the medium term. Additionally, Canada's higher sensitivity to global trade and housing risks compared to the US might result in the CAD underperforming against the USD in periods of global economic uncertainty.

USD at Crossroads: End of Strength or Start of a Crisis?

3. 9. 2024 - Josef Brynda