Il dollar finds himself in the middle of the crossfire of decisions of the world's central banks: while from US Federal Reserve a new one is taken for granted rate cut, the third this year, it seems that other Central Banks in the world have exhausted the supply of cartridges for accommodating policies and they are reversing course and starting to think about moves instead to the upside.
Il greenback, although today it is little changed against its major currency counterparts and amid thin trades for the Thanksgiving Day, in the 99,58 area, is moving towards the biggest weekly drop in at least four months. “The market will soon start thinking about major operations for 2026 and I highly doubt that one of those will be to have long dollar positions,” said Spectra Markets President Brent Donnelly, adding that if the White House economic adviser Kevin Hassett, a proponent of rate cuts, were to be named the next chairman of the Federal Reserve, this should represent a negative catalyst for the dollar.
La South Korea it was the last one today to join the new “hawks” movement, as a "hawk", causing government bonds to collapse. Even Asahi Noguchi, a former member of the Bank of Japan, took a slightly hawkish tone, advocating gradual increases in a speech in Kyushu, following a similar line to that of other BOJ policymakers. Yesterday it was the turn of the Reserve Bank of New Zealand which has effectively stopped its cycle of cuts and today the kiwi continues to gain ground. The minutes of the meeting of the European Central Bank in October, when policymakers kept rates unchanged.
Market bets on upcoming monetary moves
Markets are pricing in a 90 basis point probability of a rate cut in the United States at the FOMC meeting on December 10th, against the 75 basis points of increases in Japan and 40 in New Zeland. Sure, rates are much lower in New Zealand and Japan than in the US, but currency markets are forward-looking and the direction of movement influences exchange rates, as investors seek the best return.
Dollar counterparts have reasons to rise
Lo yen gained 0,2% to 156,11 per dollar in Asian trade today on the back of a hawkish tone from officials. Bank of Japan, after days in which he had been in an area indicated by analysts as suitable for direct interventions on the market by the authority“This could represent an interesting context for the Japanese authorities who want to intervene in the dollar/yen exchange rate,” says Francesco Pesole, forex strategist at ING.
The euro This morning it reached a 10-day high of $1,1613 on signs of peace in Ukraine, although it then turned slightly lower (-0,05%) to $1,1590. GBP It reached its highest level since late October, settling at $1,3265, and was on track for its biggest weekly gain since August, following the presentation of the budget bill to the British Parliament. The yield on the ten-year gilt fell seven basis points to 4,42%.
Il New Zealand dollar hit a three-week high of $0,5728 and has gained about 2% since the central bank took a hawkish stance yesterday: the Reserve Bank of New Zealand cut rates, but said a suspension was being discussed and signalled that the monetary easing cycle is likely over. Thanks to today's strong economic data, market participants now expect a rate hike by December 2026: New Zealand retail sales rose in the third quarter, while business confidence reached its highest level in a year.
even the Australian dollar has started to gain ground and dealers see it as a potential turning point. Yesterday, a higher-than-expected inflation rate emerged, which strengthened the hypothesis that here too the monetary easing cycle has ended. Australian 3-year and 10-year rates, at 3,86% and 4,5% respectively, are the tallest in the G10, which, analysts point out, makes the currency look cheap. At $0,6536, the Australian dollar is in the middle of a channel it has been trading in for about 18 months. Yet the Australian dollar is moving slowly in a channel it has maintained for 18 months. Perhaps a rise in the yuan, which is closely monitoring it, could unblock the currency. Kit Juckes of Societe Generale notes that the Chinese yuan, after a strong rise in recent sessions, could see further gains. The resistance of the Chinese central bank's exchange rate-setting mechanism stabilized the yuan at 7,08 per dollar today.
ECB warns eurozone banks in case of dollar decline
Yesterday the ECB he turned on a lighthouse on the possibility that the greenback could move away from its throne as the world's benchmark currency, prompting the Eurozone banks to take countermeasures in protection, increasing their liquid assets and theirs capital “buffers”.
When Trump shook the markets last spring with his tariff policy and with its pressure on the independence of the Fed, the ECB had invited banks to monitor their exposure to the dollar because it was undermining confidence in the greenback as a global reserveToday, fears arising from Trump's threats have been absorbed, but the dollar could again come under attack from interest rates.
