![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-58.png\")
<\/figure>\n\n\n\nGBP \u2013 BoE to delay any rate cuts<\/h2>\n\n\n\n
The pound lost ground against the USD this week, while gained against the JPY and seems to remain relatively unchanged against the EUR, in a sign that it allowed other currencies to have the initiative.<\/p>\n\n\n\n
On a fundamental level we note the trade relationships of the UK with the US and the EU as key. The UK seems to be able to avoid Trump-tariffs for its exports in the US, or get to suffer a possibly lower tariff rate than the EU. On the other hand, the uncertainty generated by Trump getting into office, tends to push the EU with the UK closer together on a trading level. Both the possible avoidance of US tariffs on UK products and an improvement of the EU-UK trade relationship, tend to be supportive for the pound on a fundamental level.<\/p>\n\n\n\n
On a monetary level, we highlight BoE\u2019s interest rate decision next Thursday. The bank is expected to remain on hold and resume rate cuts in its February meeting. Should the bank\u2019s forward guidance set the market\u2019s expectations in doubt by being more hawkish in its forward guidance, we may see the pound getting some support and vice versa.<\/p>\n\n\n\n
On a macroeconomic level, we would like to note the release of UK\u2019s employment data on Tuesday and a possible tighter employment market than expected could provide support for the pound, yet the highlight is expected to be the release of the November CPI rates for Wednesday. Should the headline rate continue to accelerate on a year on year level, we may see the pound being supported. The last financial data which could stir the pound would be November\u2019s retail sales on Friday and a possibly acceleration of the rate showing growth for the retail sector once again could support the sterling.<\/p>\n\n\n\n
Analyst\u2019s Opinion<\/p>\n\n\n\n
Despite the support for the pound on a monetary level, we still have some doubts for politics and macroeconomic data, especially the latter. Yet for the time being the absence of adverse fundamentals tends to allow the pound to float.<\/p>\n\n\n\n JPY seems about to end the week in the reds against the USD,EUR and GBP in a sign of a wider weakness.<\/p>\n\n\n\n For JPY traders we highlight next week on a monetary level the release of BoJ\u2019s interest rate decision next Thursday. JPY OIS currently imply a probability of 76.6% for the bank to remain on hold and proceed with a 25 basis points rate hike in its January meeting. Local media highlighted yesterday that BoJ officials are leaning towards keeping rates unchanged next week. Nevertheless we still see the risks related to the decision as tilted to the upside and a possible surprise rate hike could provide asymmetric support for the Yen. Yet should the bank remain on hold as expected, it would be kicking the can down the road, with the chances of a rate hike occurring in its next meeting being increased. Hence in such a scenario we would place considerable weight on the bank\u2019s forward guidance. Should the bank signal the possibility of a rate hike in the January meeting, we may see JPY getting some moderated support, while an absence of such signals in the bank\u2019s accompanying statement could weigh on JPY considerably.<\/p>\n\n\n\n On a fundamental level, we note the intentions of the Japanese Government to raise key taxes in 2026 to fund defence budget expansions. Also the safe haven qualities of the JPY should not be underestimated.<\/p>\n\n\n\n On a macro level, we note the preliminary December PMI figures on Monday and November\u2019s trade data on Wednesday, while the highlight is expected to be November\u2019s CPI rates on Friday and a possible acceleration of the CPI rates may support JPY as it could enhance the market\u2019s hawkish expectations and vice versa.<\/p>\n\n\n\n Analyst\u2019s opinion<\/p>\n\n\n\n Unless we see a surprise deriving from BoJ\u2019s interest rate decision, we may see the Yen continuing to be in the retreat, maybe in a more moderated manner.<\/p>\n\n\n\n For the week the common currency seems to be losing ground against the greenback, is gaining against the Yen and remains relatively stable against the sterling.<\/p>\n\n\n\n On a monetary level, we highlight ECB\u2019s interest rate decision <\/a>to cut rates by 25 basis points and signal its readiness for more easing to come. The decision tended to be more or less expected, given that economic activity in the Euro Zone is faltering.<\/p>\n\n\n\n Hence on a macroeconomic level, we highlight the release of December\u2019s preliminary PMI figures on Monday. Should the indicators show further contraction of economic activity in the Euro Zone, we may see the release weighing on the common currency. We focus our attention on Germany\u2019s manufacturing sector and on second note France\u2019s services sector, while Euro Zone\u2019s composite PMI figure is to provide a rounder view.<\/p>\n\n\n\n Euro Zone\u2019s fundamentals may be weighing on the single currency as ECB President Lagarde highlighted the risks deriving from political uncertainty and the possibility of Trump imposing tariffs on European products. On a fundamental level, overall political uncertainty is still present as premature elections were called for in February and in France, French President Macron hasn\u2019t appointed a new Prime Minister as these lines are written. The sentiment seems to be pessimistic about the outlook of the Zone and especially in germany. Factories and business are closing and a recession may be on the horizon. Hence Germany\u2019s IfO and ZEW indicators for December on Tuesday and Wednesday may prove to be important and if they fail market expectations may weigh on the EUR.<\/p>\n\n\n\n Analyst\u2019s opinion<\/p>\n\n\n\n Overall we see fundamentals weighing on the common currency as he ECB is prepared to cut rates further, there is political uncertainty in France and Germany and macroeconomic indicators are not so favorable. In Macroeconomics we recognise that inflation is on the retreat despite some acceleration ahead of the Christmas festivities, yet our worries tend to focus around economic activity and growth which seems to be faltering.<\/p>\n\n\n\n The Aussie seems to be losing ground against the USD.<\/p>\n\n\n\n On a monetary level we note that RBA released its interest rate decision last Tuesday, remaining on hold as was widely expected. The bank in its accompanying statement<\/a> altered its wording to include “Recent data on inflation and economic conditions are still consistent with these forecasts, and the board is gaining some confidence that inflation is moving sustainably towards target.” The change highlights a turn in the bank\u2019s expectations towards the dovish side which ultimately may be opening a door to incoming rate cuts.<\/p>\n\n\n\n Please note that economic activity is easing in Australia while uncertainty rises with Trump entering the White house and threatening to impose tariffs on China, Australia\u2019s biggest trading partner. On a fundamental level, our focus remain on China given the lack of evidence of a confident recovery for the Chinese economy. Yet PBoC is from now on expected to maintain an \u201cappropriately loose\u201d monetary policy and the Chinese government a more proactive fiscal policy. Hence we highlight on Monday from China, the release of November\u2019s Urban Investments, industrial output and retail sales and on Friday PBOC\u2019s interest rate decision.<\/p>\n\n\n\n On a macroeconomic level, the Aussie got some support on Thursday from the hotter than expected November employment data. In the coming week, the calendar for Aussie traders is relatively empty maybe with the exception of the December preliminary PMI figures on Monday, hence we expect fundamentals to lead the Aussie.<\/p>\n\n\n\n Analyst\u2019s opinion<\/p>\n\n\n\n Focus of Aussie traders is expected to be on China in the coming week, as a main factor of concern given the close Sino-Australian ties. Overall we do not see fundamentals favoring the Aussie, given the lack of a confident recovery of the Chinese economy and RBA\u2019s dovish tilt. Also we highlight the market sentiment as a factor that could influence the Aussie\u2019s direction, given that AUD is considered a riskier asset as a commodity currency.<\/p>\n\n\n\n The CAD continued weakening for a third week in a row against the USD.<\/p>\n\n\n\n On a monetary level, BoC\u2019s interest rate decision<\/a> tended to provide some support for the Loonie on Wednesday. The bank delivered a 50 basis points rate cut, yet in his press conference BoC governor Macklem stated that \u201cwith the policy rate now substantially lower, we anticipate a more gradual approach to monetary policy if the economy evolves broadly as expected\u201d signalling an easing in the bank\u2019s rate cutting path. The comment was the element supporting the Loonie at the release.<\/p>\n\n\n\n Other than that, we also highlight the bank\u2019s worries for Trump\u2019s intentions to slap tariffs on Canadian products imported in the US. The bank\u2019s worries seem to reflect also the market\u2019s worries, which on a fundamental level tend to weigh on the Loonie. Oil prices for the time being seem not to play a key role in the Loonie\u2019s direction, yet should oil prices get more support, we may see them supporting the Loonie as well.<\/p>\n\n\n\n On a macroeconomic level, we highlight next week the release of Canada\u2019s CPI rates for November next Tuesday. Should the rates continue to accelerate on a core and headline level, implying some persistence of inflationary pressures in the Canadian economy, we may see the Loonie getting some support as it could moderate BoC\u2019s dovishness somewhat. Other than that, we may see Canada\u2019s October retail sales next Friday stirring interest among Loonie traders.<\/p>\n\n\n\n Analyst\u2019s opinion<\/p>\n\n\n\n We tend to remain bearish for the CAD in the coming week, given the uncertainty surrounding the Loonie at a fundamental level. Trump\u2019s tariff threat yet may be countered by BoC\u2019s intentions to ease its rate cutting path. A possible risk off mood of the market may also weigh on the CAD as could a possible drop of oil prices. Other than that we consider as a highlight for CAD traders in the coming week the release of the November CPI rates.<\/p>\n\n\n\n As an epilogue we see the case for the Fed\u2019s interest rate decision dominating the market\u2019s interest until mid-week, at which point the USD may relent some of the initiative in the FX market. Overall, we expect the FX market trading mix in the coming week to remain relatively mixed, with some nice opportunities. As for US stockmarkets, we may see some cautiousness taking over, which may weigh on US stockmarkets, especially should the Fed show some hesitation in cutting rates further. Overall fundamentals are to lead US stockmarkets as after next week, we enter the Christmas week and interest may ease. As for gold\u2019s price we note that its negative correlation with the USD seems to have been interrupted in the past few days. The Fed\u2019s interest rate decision once again may interrupt the flow of gold\u2019s price, while on a deeper fundamental level, China\u2019s central bank seems to have rejuvenated its interest in gold prices which could have a bullish effect on the precious metal\u2019s price.<\/p>\n\n\n\n Se tiver alguma d\u00favida ou coment\u00e1rios sobre este artigo, solicitamos que envie um email diretamente para a nossa equipa de Research atrav\u00e9s do research_team@ironfx.com<\/a> research_team@ironfx.com<\/a><\/p>\n\n\n\n Isen\u00e7\u00e3o de responsabilidade: As the week is about to come to an end, we open a window at what next week has instore<\/p>","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-96362","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-category-financial-news","entry"],"acf":[],"yoast_head":"\n![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-59.png\")
<\/figure>\n\n\n\nJPY \u2013 BoJ to remain on hold?<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-60.png\")
<\/figure>\n\n\n\nEUR \u2013 Focus turns towards December preliminary PMI figures<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-61.png\")
<\/figure>\n\n\n\nAUD \u2013 RBA remained on hold with a dovish twist<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-62.png\")
<\/figure>\n\n\n\nCAD \u2013 Canada\u2019s November CPI rates in focus<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/12\/image-63.png\")
<\/figure>\n\n\n\nGeneral Comment<\/h2>\n\n\n\n
Esta informa\u00e7\u00e3o n\u00e3o \u00e9 considerada como aconselhamento ou recomenda\u00e7\u00e3o ao investimento, mas apenas como comunica\u00e7\u00e3o de marketing. O IronFX n\u00e3o \u00e9 respons\u00e1vel por quaisquer dados ou pela informa\u00e7\u00e3o fornecida por terceiros aqui mencionados, ou com links diretos, nesta comunica\u00e7\u00e3o.<\/p>","protected":false},"excerpt":{"rendered":"