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FOREX: Greenback Consolidates Intra-Day Weakness, FOMC Minutes Tuesday

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  • Currency markets saw the most recent dollar strength moderate to begin the week, with the appointment of Scott Bessent as Treasury Secretary under Trump providing some pushback to the short-term trend. His nomination has pinned back concerns that a tariff regime will go too far, too fast, with his views on gradualism likely meaning a more forceful approach on trade will come step-by-step, rather than an abrupt shift.
  • The USD pullback has helped spur short-covering across EUR, which outperforms all others in G10. EURUSD (+0.65%) reached as high as 1.0530, marking a ~200 pip recovery off last week's lows, although spot has slipped back below 1.0500 ahead of the APAC crossover.
  • German IFO data painted a poor picture of the German economy, The print mirrored last week's flash PMI release in that the services sector saw a clear decline - however, in the IFO, also manufacturing showed weaker again.
  • USDCHF was a notable mover on the session, declining 0.75% as SNB sight deposits data indicated the SNB may not have intervened last week. In contrast, higher beta currencies were unable to take advantage of the softer dollar, with the likes of EURAUD, EURCAD and EURNZD all rising comfortably over 0.5% to start the week and partially revising the steep declines seen late last week.
  • The minutes to the November FOMC meeting (released Tuesday at 1400ET) will be viewed in light of the hawkish tilt in Fed officials’ commentary in the 3 weeks since they decided to cut rates by 25bp. Accordingly, MNI’s Hawk-Dove Spectrum has been moved upward (in a more “hawkish” direction”) across the board.
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  • Currency markets saw the most recent dollar strength moderate to begin the week, with the appointment of Scott Bessent as Treasury Secretary under Trump providing some pushback to the short-term trend. His nomination has pinned back concerns that a tariff regime will go too far, too fast, with his views on gradualism likely meaning a more forceful approach on trade will come step-by-step, rather than an abrupt shift.
  • The USD pullback has helped spur short-covering across EUR, which outperforms all others in G10. EURUSD (+0.65%) reached as high as 1.0530, marking a ~200 pip recovery off last week's lows, although spot has slipped back below 1.0500 ahead of the APAC crossover.
  • German IFO data painted a poor picture of the German economy, The print mirrored last week's flash PMI release in that the services sector saw a clear decline - however, in the IFO, also manufacturing showed weaker again.
  • USDCHF was a notable mover on the session, declining 0.75% as SNB sight deposits data indicated the SNB may not have intervened last week. In contrast, higher beta currencies were unable to take advantage of the softer dollar, with the likes of EURAUD, EURCAD and EURNZD all rising comfortably over 0.5% to start the week and partially revising the steep declines seen late last week.
  • The minutes to the November FOMC meeting (released Tuesday at 1400ET) will be viewed in light of the hawkish tilt in Fed officials’ commentary in the 3 weeks since they decided to cut rates by 25bp. Accordingly, MNI’s Hawk-Dove Spectrum has been moved upward (in a more “hawkish” direction”) across the board.