Watch for a potential resurgence in the U.S. dollar as expectations of a U.S. rate cut fade

Watch for a potential resurgence in the U.S. dollar as expectations of a U.S. rate cut fade

04.01.2024

In the U.S. currency market yesterday, the minutes of the FOMC meeting released yesterday indicated that the policy rate is nearing the peak of the tightening cycle, while also stating the intention that "a restrictive stance remains appropriate for the time being until a sustained slowdown in inflation becomes clear." This served to rein in financial markets’ excessive pricing in of rate cuts.In response, the euro fell against the dollar from 1.0964 to 1.0892, marking its fourth consecutive day of decline.

European currencies rose against the euro following the release of Germany’s December employment statistics yesterday, which showed that the unemployment rate remained unchanged from the previous month at 5.9%, while the number of unemployed fell from 22,000 to 15,000.The EUR/AUD pair rose from 1.6153 to 1.6274, rebounding from the 20-period moving average (MA) on the 4-hour chart. Since the 75-period MA is acting as a support level on the weekly chart, we will be watching to see if the rebound continues on a time-based perspective.

Today’s schedule includes the French Consumer Price Index at 4:45 PM, Hong Kong Retail Sales at 5:30 PM, the French Manufacturing/Services PMI at 5:50 PM, the German Manufacturing/Services PMI at 5:55 PM, the Eurozone Manufacturing/Services PMI at 6:00 PM, UK Consumer Credit and UK Money Supply at 6:30 PM,UK Manufacturing/Services PMI, at 9:30 PM US Challenger Job Cuts, at 10:00 PM German CPI, at 10:15 PM US ADP Employment Report, at 10:30 PM US Initial Jobless Claims, at 11:45 PM US PMI Purchasing Managers' Index, and at 1:00 AM US Weekly Crude Oil Inventories.We will need to carefully assess whether the US dollar will regain strength as expectations of a US rate cut fade.

Past Market Reports

1. 21.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 20.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 17.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 16.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 15.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 14.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 13.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 10.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 09.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 08.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran