Global equities are higher as traders digest the latest news on the Omicron variant and the surprisingly hawkish comments by Fed Chair Powell. Bond yields are higher, but the 10-Yr remains below 1.5%. The US dollar is broadly weaker, particularly against the commodity currencies, while demand for safe haven currencies, including the dollar, JPY, and Swiss franc, is lower. This morning’s US economic data was better than expected, and traders now await Friday’s US jobs data for November. Oil prices jumped today ahead of a two-day OPEC meeting to discuss oil production levels.
December 1, 2021
EUR/USD 1.1341 GBP/USD 1.3327 USD/CAD 1.2733 AUD/USD 0.7156 USD/JPY 113.06 USD/CNH 6.3673 USD/ILS 3.1554 USD/MXN 21.2251 USD/CHF 0.9190 USD/INR 74.9113 USD/BRL 5.6185 USD/SGD 1.3627 USD/DKK 6.5578 USD/SEK 9.0352 USD/NOK 9.0390
In today’s risk-on environment, the US dollar index is lower by 0.2%. Individually, the US dollar is weakest against the commodity currencies – the MXN, AUD, NZD, and RUB. This morning’s Institute of Supply Management (ISM) Manufacturing index increased to 61.1, in line with expectations and higher than October’s 60.8. A reading above 50 indicates that manufacturing is expanding.GBP
The UK pound has rebounded sharply from yesterday’s low at $1.3195. UK Housing Prices in November exceeded expectations, while PMI Manufacturing met expectations. Traders await the next Bank of England meeting on December 16, when odds favor a 10-15 bp hike. BoE Governor Andrew Bailey speaks later today, and traders will look to see if he provides a hawkish surprise as Fed Chair Powell did yesterday.EUR
The EUR swung by a half percent today but sits little changed from yesterday’s close. Eurozone Manufacturing PMI for November was slightly less than expected and lower than October’s. Traders await a full docket of economic releases over the next few days, including Eurozone Unemployment, PPI, Retail Sales, and Investor Confidence.CAD
The Canadian dollar moved higher on the back of higher oil prices and the risk-on mood in the markets. Traders await Friday’s jobs data for Canada and next week’s Bank of Canada meeting – no hike is expected.ASIA/PACIFIC
The Australian and New Zealand dollars were outperformers overnight on the back of the risk-on market mood, which is driving higher foreign currencies and commodities.
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