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American Stock Exchange

Dollar Stays Strong as Job Market Data Looms

On Thursday, the dollar index maintained its position above 104, with investors taking a cautious approach. They are waiting for the upcoming monthly jobs report, which is anticipated to offer new insights into the current state of the US labor market. The report, due on Friday, is expected to reveal an increase in employment by 170,000 in November. Additionally, it's predicted that the unemployment rate will stay at a 22-month peak of 3.9%, and wage growth might slow down to 4%, marking the lowest since June 2021.


Recent data presents a mixed picture. Wednesday's figures suggested a slowdown in the US labor market, with the ADP report showing fewer job additions in November than anticipated, and labor costs in the third quarter being lower than expected. Despite these indications of a cooling labor market, the dollar has stayed near its highest levels in almost three weeks. This resilience is partly due to traders increasing their bets on rate cuts by other central banks. Currently, the market is pricing in about an 85% likelihood of the European Central Bank cutting rates in March 2024.​
Wall Street Recovers, Positive Data Eases Inflation Concerns

Wall Street experienced a rebound in the early trading hours, with the primary indexes showing a 0.3% increase. This positive shift comes after recent data indicated a strong US economy paired with a deceleration in inflation rates. Notably, the US job market outperformed expectations in November, with the unemployment rate declining to 3.7%. Additionally, the University of Michigan's consumer sentiment index in the US rose to 69.4 in December, a significant improvement. Interestingly, this survey also showed that inflation expectations for the coming year dropped to 3.1%, marking the lowest figure since March 2021.

In the corporate sector, there were noteworthy developments. Qualcomm received a rating change from Morgan Stanley, shifting from "overweight" to "equal weight." Meanwhile, Lululemon Athletica, a high-end apparel retailer, projected its fourth-quarter results to fall short of initial expectations.​

Dollar Plummets to Four-Month Low

Solid ECN – On Thursday, the dollar index fell below 102.4, hitting its lowest level in four months since early August. This drop came as investors digested the latest decisions on monetary policy and new economic data from the US. For the third time in a row, the Federal Reserve kept interest rates unchanged. They also signaled a more rapid reduction in rates for 2024, estimating 75 basis points in cuts, more than what was projected in September.


During the press conference, Fed Chair Powell maintained a dovish stance, hinting at possible reductions in borrowing costs due to a faster-than-expected drop in inflation. On the other hand, the European Central Bank (ECB) and the Bank of England decided to keep their rates steady. They committed to maintaining higher rates to tackle inflation. Despite robust US retail sales and a fall in weekly jobless claims, these developments didn't significantly alter investors' outlook.​

China's Stock Market Dips Amid Economic Uncertainties

Solid ECN – On Monday, a sense of economic unease led to a downturn in China's stock market, with the Shanghai Composite index decreasing by 0.4% to 2,931 and the Shenzhen Component index falling 1.13% to 9,279. These indices hit their lowest points in over a year, reflecting the growing concerns about China's economic stability. Recent mixed economic data from November has highlighted weak demand in the country, a major point of discussion in a high-level policy meeting held last week. Despite setting economic goals and formulating policy strategies, Chinese officials were unable to boost investor confidence.

Attention is now shifting to the upcoming decision on the loan prime rate by the People's Bank of China, set to be announced on Wednesday. The global market sentiment also suffered, influenced by comments from John Williams, President of the New York Fed, who expressed skepticism about the likelihood of rate cuts. Major losses were recorded by leading companies, with Contemporary Amperex, COL Group, and iSoftStone seeing declines of 5.2%, 11.3%, and 5.8%, respectively.​

Canada's New Home Prices Dip in November 2023

In November 2023, Canada witnessed a 0.2% month-over-month decrease in new home prices, slightly exceeding the market's forecast of a 0.1% reduction. This decline follows a steady reading in October. A notable change was seen across 25 of the 27 census metropolitan areas, where costs either decreased or remained stable. Sherbrooke experienced the most substantial drop in prices, falling by 1.2%, with St. John's and Hamilton closely following, each recording a 1.0% decrease. These significant reductions are primarily linked to less robust market conditions.

Conversely, new home prices in Trois-Rivières and St. Catharines-Niagara bucked the trend, rising by 0.5% and 0.3% respectively. These increases can be attributed to the escalating costs of construction in these areas. On an annual basis, the cost of new homes in Canada in November 2023 marked a decrease of 0.9%, continuing a downward trajectory that has persisted since November 2019.​
BoJ's Steady Policy Boosts Tokyo Stocks

Solid ECN – On Tuesday, the Nikkei 225 index rose by 1.4%, reaching 33,219, its highest point in two weeks. The broader TOPIX index also saw an increase, finishing 0.7% higher at 2,334. These gains followed the Bank of Japan's decision to maintain its ultra-easy monetary policy, with a commitment to keeping interest rates low. The bank, however, did not provide any clues about potential changes to this policy in the next year.


Most sectors ended the day lower, except for basic materials, which remained relatively unchanged. Real estate emerged as the standout sector, leading the gains, followed by technology and non-cyclical industries. Among individual companies, Tokyo Electron saw a significant increase of 3.7%, with Fast Retailing and Recruit Holdings both gaining 2.2%.​
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