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4 Global Market Updates- 5 December, 2022

by Elena Martin   ·  December 5, 2022  

4 Global Market Updates- 5 December, 2022

by Elena Martin   ·  December 5, 2022  
In this article, we have covered the highlights of global market news about the USD/CAD, EUR/USD, AUD/USD and GBP/USD.

The USD/CAD is in for a rocky ride as the BOC-Fed policy divergence widens.

In the Tokyo session, the loonie asset fell significantly below the round-level support of 1.3400 as the US Dollar saw a large increase in risk appetite.

After hitting a new low of 104.14, the US Dollar Index (DXY) has reversed sideways. The risk-on impulse has significantly intensified. Hence it is anticipated that the USD Index will continue to decline. To protect the US economy from financial threats, the Federal Reserve (Fed) is changing its culture to gradual rate increases, putting tremendous pressure on the US dollar. Investors are waiting for the US ISM Services PMI data to be released to get new momentum, which is why S&P500 futures are performing below expectations.

On the strength of encouraging US Nonfarm Payrolls (NFP) statistics, the 10-year US Treasury rates have steadily risen to close to 3.53%. Additionally, the Federal Reserve policymaker’s aggressive remarks on the interest rate peak have hurt US Treasury bonds. Charles Evans, president of the Chicago Fed, said on Friday, according to Reuters, “We are probably going to have a little higher peak to Fed policy rate even as we moderate pace of rate increases.”

EUR/USD retests a multi-month high, aiming for 1.0600 amid persistent USD selling

The EUR/USD pair is expected to build on last week’s breakthrough momentum past the crucial 200-day SMA on Monday and continue to gain ground. The rising trend, supported by the pervasive dollar-bearish attitude, raises spot prices to around 1.0585, the highest level since late June.


In fact, despite expectations for a more gradual tightening of monetary policy by the Fed, the USD Index, which gauges the Dollar’s performance relative to a basket of currencies, drops to a more than five-month low. Market investors think the US central bank will adopt a more accommodating attitude and announce a rate increase of just 50 basis points at its forthcoming meeting on December 13–14. The safe-haven Dollar continues to be undermined by this and the optimism around potential changes to COVID-19 regulations in China.

AUD/USD rises to a seven-week high over 0.6850 as the RBA prepares to tighten policy further.

In the Asian session, the AUD/USD pair’s rebound from 0.6770 to over 0.6850 has been extended. Due to the Reserve Bank of Australia’s (RBA) intention to tighten policy even more to promote price stability, the Aussie asset has seen outstanding purchasing activity from market players.

In addition to the RBA’s monetary policy, the Australian Dollar has gained strength due to a bullish market environment. The US Dollar Index (DXY) has dropped to a five-month low of 104.14 due to a general reduction in safe-haven appeal. As a Federal Reserve (Fed) policymaker suggested a higher interest rate peak despite a reduction in rate speed, S&P500 futures have been muted. The 10-year US Treasury rates have also significantly improved. As a result, they are approaching 3.53%.

Charles Evans, president of the Chicago Fed, stated, according to Reuters, “We are probably going to have a little higher peak to Fed policy rate even as we moderate pace of rate rises.”

GBP/USD trades over 1.2300 as market sentiment increases, and the US ISM Services PMI is being watched.

In the Asian session, the GBP/USD pair’s auction profile moved over the pivotal threshold of 1.2300. Due to the market participants’ strong purchasing interest in the Cable, the risk-on profile has become even more favourable. The major has renewed its five-month high over 1.2340 and is anticipated to continue rising since there is a lot of demand for risky assets.


The prospects of the Federal Reserve’s current interest rate rise pace slowing down are increasing, which has caused the US Dollar Index (DXY) to retest its five-month low at 104.14. (Fed). The Fed will slow down the rate at which it expands interest rates to decrease financial risks and to monitor the results of recent measures to bring about price stability.

Ahead of US ISM Services PMI data, investors act cautiously, as shown by the S&P500 futures’ muted performance. The 10-year US Treasury rates have increased to around 3.53%.

A better-than-expected US ISM Services PMI publication should provide a stronger cushion for the US Dollar despite the positive US Nonfarm Payrolls (NFP) data released on Friday. The consensus estimates the economic statistics to be 55.6 compared to 54.4 in the previous report. In addition, the ISM Services New Orders Index data, which is expected to be higher at 58.5 compared to the previous release of 56.5, will influence Cable.

Please click here for the Market News Updates from 2 December, 2022.