Foreign exchange market: currencies in contracted order : Orishas-finance

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Foreign exchange market: currencies in contracted order

30/12/2024

Source : ORISHAS FINANCE

Categories: Economy/Forex

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Foreign exchange market: currencies in contracted order

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On Monday, the US dollar reigned thanks to the support of higher returns, while the Australian and New Zealand dollars were hurt by yawning yield spreads. The yen and yuan down, the

Indian rupee is about to rise.

The dollar index against its main rivals remained stable at 107.98. For the month, the dollar index is up 2.3%, bringing year-to-date gains to 6.6%. The dollar has gained 10 yen since December 3, with much of the fall in the Japanese currency coming after the Federal Reserve issued a cautious message on December 18 about future rate cuts from the Federal Reserve

Australian and New Zealand dollars were locked near their recent lows on Monday, as yield spreads widened in favor of their American counterpart and speculators watch for breakdowns in the main chart supports.

The New Zealand dollar held steady at $0.5639, again close to a two-year low of $0.5608.

The Japanese yen traded around its lowest levels in five months against a dollar supported by rising US yields, as the low liquidity at the end of the year kept most currencies in tight ranges at the end of the year.

The yen was trading at 157.71, only the risk of Japanese intervention preventing a new test of the 160 level last seen in July.

The Chinese yuan fell to its lowest level in nearly 14 months against the dollar on Monday, in light trades as the end of the year approached, pulled down by rising US bond yields. The yuan is on track to record its third consecutive year of losses, hampered by widening yield differentials between the world's two largest economies and by threats of tariffs from US President-elect Donald Trump. At 03:15 GMT, the onshore yuan was down 0.05% to 7.2988 per dollar, not far from the psychologically important mark of 7.3, last seen in November 2023. Its offshore counterpart traded at 7.3048 yuan

per dollar.

The Indian rupee is about to rise on Monday, building on the momentum of the previous session in which central bank interventions caused the exit of long speculative positions on the dollar. The one-month undeliverable futures contract indicated that the rupee would open at 85.40-85.42 per US dollar, compared to closing at 85.5325 in the previous session. The rupee hit an all-time low of 85.8075 on Friday, leading the Indian Central Bank to sell the dollar massively. Based on what one trader described as a “very busy intervention,” long-term speculative dollar positions recorded profits

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