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FOREX: Dollar Index Set to Close 2024 at Yearly Highs

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  • We have seen some constructive price action for the greenback to finish the year, with the USD index shrugging off the early session declines to now trade firmly in the green, up 0.31% and potentially assisted by month/year end dynamics.
  • EURUSD has traded with an offered tone throughout the US session, sliding to the worst level of the week below 1.0350, just ahead of key support at 1.0335, the Nov 22 low and a bear trigger.
  • USDJPY has also recovered well, rallying over 100 pips from the overnight lows, with spot now rallying back above the 157.00 handle. Officials at the BOJ fear that the real neutral rate of interest could be even lower than the previously-estimated range, MNI understands.
  • Aussie and Kiwi are also notable underperformers to end the year, with both AUDUSD and NZDUSD sitting at cycle lows and the lowest levels since October 2022, below 0.62 and 0.56 respectively. For AUDUSD, scope is seen for an extension towards 0.6158 next, a Fibonacci projection.
  • The broad dollar bid has also assisted USDMXN to a fresh year-to-date high above 20.84 at typing. The pair had a clean break of 20.40 during yesterday’s session and saw solid follow through amid the breakdown for major equity indices. While price action may have been exacerbated by the lower holiday liquidity, the imminent Trump presidency and Banxico in easing mode are likely weighing on the peso.
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  • We have seen some constructive price action for the greenback to finish the year, with the USD index shrugging off the early session declines to now trade firmly in the green, up 0.31% and potentially assisted by month/year end dynamics.
  • EURUSD has traded with an offered tone throughout the US session, sliding to the worst level of the week below 1.0350, just ahead of key support at 1.0335, the Nov 22 low and a bear trigger.
  • USDJPY has also recovered well, rallying over 100 pips from the overnight lows, with spot now rallying back above the 157.00 handle. Officials at the BOJ fear that the real neutral rate of interest could be even lower than the previously-estimated range, MNI understands.
  • Aussie and Kiwi are also notable underperformers to end the year, with both AUDUSD and NZDUSD sitting at cycle lows and the lowest levels since October 2022, below 0.62 and 0.56 respectively. For AUDUSD, scope is seen for an extension towards 0.6158 next, a Fibonacci projection.
  • The broad dollar bid has also assisted USDMXN to a fresh year-to-date high above 20.84 at typing. The pair had a clean break of 20.40 during yesterday’s session and saw solid follow through amid the breakdown for major equity indices. While price action may have been exacerbated by the lower holiday liquidity, the imminent Trump presidency and Banxico in easing mode are likely weighing on the peso.