The dollar has started the week on a strong footing, gaining against all G10 currencies and most major currencies. The dollar’s G10 gains are bookended with +1.20% vs. NOK and +0.03% vs. JPY. Other notable gains: +0.63% vs. GBP, +0.61% vs. AUD, and +0.49% vs. EUR.
The dollar’s performance is aligned with U.S. Treasury yields which have also moved higher today. Yields are higher in all tenors with the middle curve dates rising the most: 2yr +0.93%, 3yr +0.96%, 4yr +0.92%, 5yr +0.09%, and 10yr +0.075%. Fed Funds Futures imply an 81% probability of a 25 basis-point cut at the FOMC’s September meeting, and the Overnight Rate 4.4% by then (down from the current 5.335% implied rate).
Bitcoin is making a move today, +7.22% at $41,593 (+10.19% over 4 days), its highest mark since April of 2022 and is +151.48% this year.
Economic data this week is dominated Friday’s Nonfarm Payrolls for November. Recall that it was last month’s Nonfarm payrolls surprise decline (150k vs. 180k estimate) that sparked November’s dollar selloff. Traders, wary of a repeat, may set the tone for a weaker dollar leading up to Friday’s data.
The Bank of Canada will announce its latest Rate Decision on Wednesday, the expectation for no change at 5%.
Gold spiked to $2,135.39 overnight (a 3.11% increase over Friday’s close), its highest price ever. It has since retraced and is now -1.25% for the day but still positive for the month.
