Dollar Dominance Continues Despite Slower Momentum
The dollar remains firmly in control, with the dollar index reaching its highest level since early November, even as its momentum shows signs of slowing. Markets have fully priced in a dollar-bullish U.S. administration, sustaining strong demand for the currency.
Republicans securing control of the House has given Donald Trump a clear path to implement his policies, further bolstering confidence in the dollar. This strong-dollar environment is proving favorable for U.S. equities, which continue to hover near record highs, though it is putting additional pressure on other economies.
The euro has felt the strain, plunging to a new yearly low against the dollar. Growing speculation suggests that the European Central Bank (ECB) could respond with a more aggressive 50-basis-point rate cut at its upcoming meeting.
Elsewhere, Australian employment data released earlier today was weaker than expected, while the Eurozone delivered mixed results, with steady employment and GDP figures offset by disappointing industrial production numbers.
Investors now shift their focus to upcoming data and events, including U.S. producer prices, initial jobless claims, ECB minutes and commentary, and a key speech from Federal Reserve Chair Jerome Powell.
