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New Month, Same EUR Weakness

FOREX
  • The greenback sits lower, reversing only a small part of yesterday's sharp month-end rally. The USD Index was capped by the 200-dma (103.586) in Thursday trade, and prices hold below there across early Europe and into the NY crossover.
  • The single currency also trades poorly, helping EUR/GBP extend the recent downtick to put the cross lower for a seventh consecutive session. The cross has now cleared three notable levels of support at 0.8650, 0.8640 and now 0.8616. Weakness coincides with the rising pricing for ECB rate cuts across 2024 this week, with the March meeting now seen as a 50/50 call for the first rate cut of the cycle. This week's soft CPI data continues to pervade, proving supportive of bond and equity prices and while EUR/GBP's remains weak, it is yet to reach technically oversold levels.
  • Scandi currencies are the main beneficiaries, aided higher by strong stock markets with the EuroStoxx50 higher by 0.6% and US stock futures pointing to a modestly higher open to start December.
  • Focus Friday rests on Fed's Powell, with the chair set to make one of the final appearances for the FOMC ahead of the pre-decision media blackout period set to kick in at the weekend. Powell appears twice, speaking at a fireside chat in Atlanta, Georgia, with text set to release ahead of a subsequent Q&A.
  • The Canadian jobs report is also due, with markets expecting net change in employment to slow to +14.0k from +17.5k previously. ISM Manufacturing data for November is set to follow, closing off the week's economic schedule.
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