Here is what you need to know on Monday, December 8:
The US dollar (USD) began the week on the back foot, extending its recent decline as the USD Index slipped below 99.00 after two straight weeks of losses. European markets will look to the December Sentix Investor Confidence survey for the next sentiment cue.
USD performance this month
The dollar underperformed most major currencies in early December, with the Australian dollar leading gains against the greenback as traders continued to price in a more dovish Federal Reserve (Fed) trajectory.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
| USD | -0.0056 | -0.007 | -0.0057 | -0.0113 | -0.0146 | -0.0091 | -0.0002 | |
| EUR | 0.0056 | -0.0015 | 0 | -0.0057 | -0.009 | -0.0035 | 0.0055 | |
| GBP | 0.007 | 0.0015 | 0.0041 | -0.0043 | -0.0076 | -0.0021 | 0.0069 | |
| JPY | 0.0057 | 0 | -0.0041 | -0.0056 | -0.0091 | -0.0035 | 0.0054 | |
| CAD | 0.0113 | 0.0057 | 0.0043 | 0.0056 | -0.0039 | 0.0023 | 0.0112 | |
| AUD | 0.0146 | 0.009 | 0.0076 | 0.0091 | 0.0039 | 0.0056 | 0.0146 | |
| NZD | 0.0091 | 0.0035 | 0.0021 | 0.0035 | -0.0023 | -0.0056 | 0.009 | |
| CHF | 0.0002 | -0.0055 | -0.0069 | -0.0054 | -0.0112 | -0.0146 | -0.009 |
Fed expectations weigh on USD
Growing expectations that the Fed will adopt a softer policy stance have pressured the USD from the start of the month. Markets will turn their focus to Wednesday’s rate decision and the updated Summary of Economic Projections (SEP), which could set the tone heading into year-end. Before the Fed announcement, Tuesday’s JOLTS job openings data will offer fresh insight into labor market dynamics. US equity futures were modestly higher in early European trading on Monday.
China trade data surprises to the upside
Asian session data showed a stronger external sector in China, with exports rising 5.9% year-over-year in November and imports up 1.9%. As a result, China’s trade surplus widened sharply to CNY 792.57 billion from October’s CNY 640.40 billion.
AUD/USD supported ahead of RBA decision
AUD/USD held steady near 0.6650 after last week’s 1.5% rally. The Reserve Bank of Australia (RBA) is widely expected to leave rates unchanged at 3.6% in Tuesday’s meeting, keeping the pair supported into the announcement.
USD/JPY steadies above 155
USD/JPY hovered above 155.00 as the week began. Japan’s Finance Minister Satsuki Katayama noted recent “one-sided and rapid” FX moves, repeating that authorities stand ready to act if necessary.
EUR/USD extends rebound
EUR/USD edged higher early Monday, trading above 1.1660 after last week’s volatile swings. The pair’s tone remains constructive as dollar weakness persists.
GBP/USD holds firm above 1.3300
GBP/USD consolidated above 1.3300 in the European session, maintaining last week’s 0.75% gain as sterling benefited from improved risk appetite.
Gold trades slightly higher
Gold spent last week in a tight range but succeeded in holding above the $4,200 handle. XAU/USD ticked higher in early European trade on Monday, testing the $4,210 area as markets remained cautious ahead of key central bank decisions.
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