Daily market analysis

Forex Market Analysis: Key Moves in U.S. Dollar & Markets 13 December 2023

December 15, 2023

CURRENCIES:

  • Key Points:
    • The U.S. dollar may experience heightened volatility in the coming days due to significant economic releases.
    • The FOMC decision is expected to be a crucial risk event for financial markets.
    • The Federal Reserve is likely to maintain the current interest rate range of 5.25% to 5.50% during its December monetary policy announcement.
    • Chairman Powell suggests a cautious approach, indicating it might be too early to assume a sufficiently restrictive stance by the Fed.
    • Traders are advised to pay attention to the “Summary of Economic Projections” for insights into the central bank’s policy outlook.
    • Market expectations currently foresee approximately 100 basis points of easing over the next 12 months.
    • The Fed may resist aggressive rate cuts for 2024 due to persistent inflation and the need to prevent further relaxation in financial conditions.
    • Such a stance could lead to a hawkish repricing of the central bank’s path, resulting in upward pressure on yields and the U.S. dollar.

STOCK MARKET:

  • The U.S. dollar may experience heightened volatility in the coming days due to significant economic releases.
  • The FOMC decision is expected to be a crucial risk event for financial markets.
  • The Federal Reserve is likely to maintain the current interest rate range of 5.25% to 5.50% during its December monetary policy announcement.
  • Chairman Powell suggests a cautious approach, indicating it might be too early to assume a sufficiently restrictive stance by the Fed.
  • Traders are advised to pay attention to the “Summary of Economic Projections” for insights into the central bank’s policy outlook.
  • Market expectations currently foresee approximately 100 basis points of easing over the next 12 months.
  • The Fed may resist aggressive rate cuts for 2024 due to persistent inflation and the need to prevent further relaxation in financial conditions.
  • Such a stance could lead to a hawkish repricing of the central bank’s path, resulting in upward pressure on yields and the U.S. dollar.

COMMODITIES:

  • Gold prices and the Nasdaq 100 are anticipated to experience increased volatility in the upcoming days due to significant events scheduled on the economic calendar.
  • Market attention will be directed towards the U.S. inflation report on Tuesday and the Federal Reserve’s monetary policy announcement on Wednesday.

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Styliana Charalambous
Market Analyst

My name is Styliana Charalambous, possessing a professional qualification as a Chartered Certified Accountant and a Bachelor’s Degree in Accounting and Finance. Highly motivated financial analyst with expertise in audit and investment strategies. I have several years of experience in the finance industry, as an audit supervisor at KPMG and the Head of Investment & Market Research in a multinational Fintech company.

Passionate about personal finance, investing, and creating finance content on social media. Lecturer in Accounting & Finance at Canterbury Christ Church University. I am the Founder and CEO of Selfmade Academy, an organization that helps thousands of students worldwide to plan for their financial future and make smart decisions about their money

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