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Global markets traded with a risk-supportive tone as the US Dollar extended its decline, hitting fresh multi-month lows amid growing expectations for Federal Reserve rate cuts. The softer greenback provided tailwinds for major FX pairs, with EUR/USD holding near the 1.1800 handle and NZD/USD consolidating close to its strongest levels since October. Meanwhile, USD/CAD slid to five-month lows as declining US yields and firmer oil prices combined to pressure the pair. In commodities, WTI edged higher toward $58.50 as geopolitical tensions continued to support energy markets.
The US Dollar Index has slipped to fresh lows near 97.80, marking its weakest level since October as markets continue to price in a more aggressive Federal Reserve easing cycle. Declining US yields and subdued inflation expectations are keeping the Dollar under sustained pressure.
Geopolitical Risks: Risk sentiment remains relatively constructive, reducing defensive demand for the Dollar.
US Economic Data: Recent data has reinforced expectations of slowing momentum.
FOMC Outcome: Growing confidence in multiple Fed rate cuts is weighing heavily on the USD.
Trade Policy: No immediate trade developments are influencing Dollar demand.
Monetary Policy: A clearly dovish Fed outlook is eroding yield support for the greenback.
Trend: Bearish with strong downside momentum.
Resistance: 98.30, then 98.80.
Support: 97.50 followed by 96.90.
Forecast: The Dollar may remain under pressure unless incoming data surprises to the upside.
Market Sentiment: Bearish on the USD.
Catalysts: US macro data and Fed communication.
WTI crude is drifting higher toward the $58.50 area, supported by ongoing geopolitical tensions and a softer US Dollar. Price action suggests a steady recovery despite broader macro uncertainty.
Geopolitical Risks: Heightened tensions continue to add a risk premium to oil prices.
US Economic Data: Slower growth expectations are offset by supportive monetary conditions.
Trade Policy: No new trade-related catalysts impacting oil markets.
Trend: Gradually recovering within a broader range.
Forecast: Further upside is possible if geopolitical risks persist.
Market Sentiment: Cautiously bullish.
Catalysts: Geopolitical headlines and US inventory data.
NZD/USD is consolidating just below the mid-0.5800s, hovering near its highest level since October. The pair continues to benefit from broad US Dollar weakness and improving risk appetite.
Geopolitical Risks: Stable risk sentiment supports higher-beta currencies like NZD.
US Economic Data: Weak USD dynamics remain the dominant driver.
FOMC Outcome: Fed easing expectations favor upside in NZD/USD.
Trend: Bullish but consolidating.
Resistance: 0.5850, then 0.5900.
Support: 0.5750 followed by 0.5700.
Market Sentiment: Constructive.
Catalysts: US data releases and global risk sentiment.
EUR/USD is holding near the 1.1800 level after pulling back slightly from three-month highs. The pair remains well-supported by broad Dollar softness and stable Eurozone fundamentals.
Geopolitical Risks: Limited direct impact on the Euro currently.
US Economic Data: Weakening US outlook supports EUR/USD upside.
FOMC Outcome: Fed cut bets continue to pressure the Dollar.
Trend: Bullish with near-term consolidation.
Resistance: 1.1850, then 1.1920.
Support: 1.1720 followed by 1.1650.
Forecast: The pair may resume gains if USD weakness persists.
Market Sentiment: Bullish.
Catalysts: US data surprises and ECB commentary.
USD/CAD has fallen to five-month lows below 1.3700 as the US Dollar weakens broadly and oil prices edge higher. The move reflects a widening divergence between Fed easing expectations and relatively stable Canadian fundamentals.
Geopolitical Risks: Energy-related tensions support the Canadian Dollar via oil prices.
FOMC Outcome: Fed easing expectations drive downside pressure.
Trend: Bearish.
Resistance: 1.3760, then 1.3820.
Support: 1.3650 followed by 1.3580.
Forecast: Further losses are possible if oil prices remain firm.
Market Sentiment: CAD-positive.
Catalysts: Oil price action and Fed-related headlines.
With Fed easing expectations firmly priced in, the US Dollar may remain vulnerable in the near term unless incoming data challenges the current narrative. Currency markets are likely to stay selective, favoring higher-beta and commodity-linked currencies, while energy prices remain sensitive to geopolitical developments. As liquidity thins into the holiday period, traders may remain cautious, as even modest data surprises or headlines could trigger outsized moves across FX and commodities.
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