Will the U.S. dollar, now the world’s strongest currency, maintain its recovery? Keep an eye on its direction.

Will the U.S. dollar, now the world’s strongest currency, maintain its recovery? Keep an eye on its direction.

05.12.2023

In yesterday’s U.S. trading session, the U.S. dollar emerged as the strongest currency. The USD/JPY pair rebounded by approximately 120 pips, rising from 146.229 to 147.450, recovering from its lowest level in the past three months.However, the USD/JPY pair’s daily RSI is trending downward from 70 and still has some room before reaching the oversold level of 30. We will need to carefully assess whether the U.S. dollar will maintain its upward momentum against the yen ahead of next week’s FOMC meeting.

European currencies saw the Swiss franc fluctuate against the yen after Switzerland’s November Consumer Price Index (CPI), released yesterday, showed a year-over-year decline of about 0.3 percentage points from the previous month’s 1.7% to 1.4%.The CHF/JPY pair fell by about 110 pips to 167.717 before recovering to its opening level. During today’s Asian trading session, the pair has been moving higher. We will need to keep an eye on price action during the European session to see if the franc will continue to rise against the yen.

Today, Sweden’s current account balance will be released at 4:00 p.m., France’s industrial production at 4:45 p.m., France’s services PMI at 5:50 p.m., Germany’s services PMI at 5:55 p.m., and the Eurozone’s services PMI at 6:00 p.m.,6:30 p.m. UK Services PMI, 7:00 p.m. Eurozone Producer Price Index, 9:00 p.m. Brazil Q3 GDP,U.S. Redbook Large Retailer Sales at 10:55 p.m., U.S. Services PMI at 11:45 p.m., U.S. JOLTS Job Openings at midnight, U.S. ISM Non-Manufacturing PMI, and remarks by Federal Reserve Governor Bowman are scheduled.We’ll need to carefully assess whether the U.S. dollar—now the world’s strongest currency—will maintain its recovery.