ACY Securities

The US dollar stabilized overnight following a volatile Friday session. Personally, I observed that it initially strengthened post the release of a robust non-farm payrolls report but later relinquished those gains due to a weaker-than-expected ISM services survey later in the day.

Mixed US economic data saw the Dollar end mixed against various Rivals in choppy Friday pre-weekend trade. Non-Farm December Payrolls saw an addition of 216,000 jobs, beating median estimates of 170,000 and 173,000 in November. The Unemployment rate was unchanged at 3.7%.

As we step into 2024, the USD is making a comeback, thanks to investors recalibrating their expectations for aggressive Fed rate cuts. This shift is pivotal, and if upcoming US data nudges investors to reconsider their dovish Fed outlook, we anticipate further USD gains.

The yen's lacklustre performance has been evident at the commencement of the new calendar year, retracting the gains accrued over the holiday period. This retreat has propelled the USD/JPY pair above the 145.00-level on last Thursday, surpassing the low recorded on December 28th at 140.25.

Private Businesses from the U.S. (ADP) hired 164K workers, higher than economist’s forecasts of 120K. U.S. Claims for Unemployment Benefits were also better, down to 202K from 220K previously.

Examining recent data from the UK, it becomes increasingly apparent that the prevailing disinflationary trend is poised to persist, notably underscored by the latest insights from the BRC shop price data.

In my analysis of the Q1 and Q2 US dollar forecasts, I emphasize the potential for the US dollar to recover some of the significant losses experienced in the months of November and December.

The Dollar Index (DXY) began 2024 on a high note, rebounding 0.81% up from its 2023 close. Bets that global interest rates would ease were pared, while bond yields soared. The 10-year US bond rate climbed to 3.94% (3.88%). Two-year US yields jumped 8 basis points to 4.33%.

As we usher in the new year, I extend our warmest wishes for a joyous, healthy, and prosperous 2024 to all our readers. My most unconventional projection for 2024 revolves around our growth forecast. Anticipating a Q4/Q4 GDP growth of 2%, my prediction significantly exceeds the consensus of 0.9% and the FOMC’s forecast

Will the anticipation of a rate cut by the Federal Reserve increase? The US dollar exhibited a modest resurgence in the latter part of the previous year, rebounding from an intra-day low of 100.62 on December 28th to reach an intra-day high of 101.59.

Welcome to the era of increased economic tensions, rising inflation, heightened sovereign debt, and elevated interest rates—where peace takes a back seat to financial challenges. This is the new normal we find ourselves in.

The Dollar Index (DXY) rebounded off July 5-month lows at 100.62 to 101.22 (101.42 previously). Against the Japanese Yen, the US Dollar fell to 141.45 (142.45 previously) as speculation rose that the Bank of Japan exit from negative rates sooner than later.