#14 - Trump Trade Boosts Dollar Amid Market Shifts
Jonathan Cusimano
Head of FX and Treasury @Statrys I Helping 1000+ SMEs stay on top of the Payment Game
For the week of 11 November to 17 November, here is a summary of market news that may help you gain clarity and make informed decisions in the foreign exchange market.
If there's a particular point that interests you or if something is missing from this newsletter, feel free to let me know by commenting on this article!
DYX - EUR/USD
The “Trump Trade” continues to strengthen the dollar, although we saw a pause on Friday. EUR/USD has already depreciated by about 3.75% since Trump’s election. A technical rebound could be underway this week. The ECB is set to release its Q3 wage negotiation report on Tuesday, which will be a crucial indicator for the continuation of its monetary policy.
GBP/USD
UK inflation likely rose above the 2% target to 2.2% in October, with the data expected this Wednesday. Unless there’s a surprise, the BOE is unlikely to lower rates next month, having already enacted two rate cuts.
USD/JPY
October’s core CPI, due Friday, is anticipated at 2.2% compared to 2.1% in the previous month. Markets expect a 25-basis-point rate hike in December, with a 50% probability.
AUD/USD
The RBA meeting minutes will be available this Tuesday. The RBA has taken a hawkish tone following its 6 November decision. It remains the only major central bank yet to begin lowering policy rates. Futures indicate a 25-basis-point cut, with a 50% probability at the April 2025 meeting.
USD/CNH
CNH Hibor rates have risen for shorter maturities of up to one month, reducing the profitability of CNH shorts against the dollar. This likely reflects a PBoC measure to deter “CNH shorts” who benefit from a favourable rate differential. The PBoC has reiterated its desire to prevent excessive CNH depreciation against the dollar, with tools at its disposal, such as certificate sales, reserve requirement adjustments, and dollar sales in the spot market.
Key Events to Watch This Week: