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 daily RSI for USD/JPY is trending downward from 70, leaving room to fall to 30, which is considered an oversold level.We will need to carefully assess whether the US dollar against the yen can maintain its momentum ahead of next week’s FOMC meeting.

European currencies saw the Swiss franc fluctuate against the yen after yesterday’s release of Switzerland’s November Consumer Price Index (CPI), which fell by about 0.3 percentage points year-on-year from the previous month’s 1.7% to 1.4%. The CHF/JPY pair dropped by about 110 pips to 167.717 before recovering to its opening level.During today’s Asian trading session, the pair is showing an upward bias. We will need to monitor price action during European trading hours to see if the franc continues to rise against the yen.

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