The start of the week promises to be turbulent on the financial markets, marked by significant movements around the US dollar (USD). Investors are closely watching economic data due on Tuesday, including the euro zone inflation report and key indicators from the United States.
Increased pressure on the US dollar
On Monday, the dollar came under selling pressure, penalized by a global climate of risk appetite. Eurostat’s release of December inflation data and US inflation reportsISM Services PMI and JOLTS job offers focus investors’ attention.
In the early hours of the morning, the dollar index (DXY) posted losses, slipping below the 108 point mark. US stock index futures also opened slightly lower, confirming mixed sentiment in the markets.
Political statements and volatility
In a tense political context, an article from Washington Post reported that President-elect Donald Trump’s administration is considering tariffs targeting critical imports. Although this information was labeled “fake news” by Trump, markets reacted cautiously, fueling renewed volatility.
Weekly currency performance
The US dollar showed notable weakness against several major currencies. According to current data, the pound sterling (GBP) stands out as the best performer, recording a gain of 0.93% against the greenback, while theeuros (EUR) follows closely with an increase of 0.86%. Conversely, the Japanese yen (JPY) showed some resilience, limiting its losses to 0.38%.
Weekly variation table
| Devise | Variation face au USD |
|---|---|
| EUR | +0,86 % |
| GBP | +0,93 % |
| JPY | -0,38 % |
| CAD | -0,90 % |
Euro zone: focus on inflation
All eyes are on the inflation figures in the euro zone, where the Harmonized Index of Consumer Prices (HICP) is expected to rise to 2.4% for December, compared to 2.2% in November. This data will strongly influence the direction of theeuros (EUR) against its main counterparties.
Major pairs on the move
- EUR/USD : After a strong increase on Monday, the price stabilizes around 1.0400, indicating a consolidation phase.
- GBP/USD : The pound sterling continues its bullish rally, crossing the threshold of 1.2500 before falling back slightly.
- USD/JPY : The pair peaked at 158.50 before retreating following warnings from the Japanese Finance Minister about excessive market movements.
Gold: stability regained
Gold, often seen as a safe haven, fell below $2,620 on Monday, before rebounding slightly to $2,640 on Tuesday morning. This stabilization reflects a certain caution among investors in a climate of global uncertainty.
Frequently asked questions about the US dollar
What is the US dollar?
The US dollar (USD) is the official currency of the United States and the most traded currency in the world. It accounts for approximately 88% of global transactions, with an average daily volume of $6.6 trillion in 2022.
How does monetary policy influence the dollar?
The Federal Reserve (Fed) adjusts interest rates to control inflation and promote employment. A rise in rates tends to strengthen the dollar, while a fall exerts downward pressure.
What is the impact of quantitative easing?
This measure consists of increasing the money supply to stimulate the economy. By buying bonds, the Fed injects liquidity, which generally weakens the dollar. Conversely, the quantitative tighteningor quantitative tightening, tends to support its value.
