CURRENCY RANKINGS REPORT Monday, December 2, Week 49, 2024
Currency Rankings (by fundamental strength):
USD - VERY STRONG (unchanged)
Services PMI: 57.0 vs 55.0 prior
Manufacturing PMI: 48.8 vs 48.5 prior
Unemployment: 4.1% (unchanged)
Inflation: Core PCE 2.7% YoY
CHF - STRONG (unchanged)
CPI: 0.6% (3-year low)
Manufacturing PMI: 49.9 (unchanged)
SNB intervention risk rising
Safe-haven demand intensifying
EUR - MODERATELY STRONG (↓ from STRONG)
Composite PMI: 48.1 vs 50.0 prior
CPI: 2.3% vs 2.0% prior
German political crisis impact
ECB signals December cut likely
GBP - MODERATELY WEAK (↓ from MODERATELY STRONG)
Manufacturing PMI: 48.6 vs 49.9 prior
CPI: 2.3% vs 1.7% prior
Labour's £40bn tax increase announced
BOE rate cut expectations rising
JPY - NEUTRAL (unchanged)
Core CPI: 2.3% (unchanged)
Manufacturing PMI: 49.0 vs 49.2 prior
BOJ hints at December policy shift
Intervention watch near 155.00
CAD - WEAK (unchanged)
BOC cut rates 50bps to 3.75%
Unemployment: 6.5% (unchanged)
CPI: 2.0% vs 1.6% prior
GDP growth concerns persist
AUD - VERY WEAK (unchanged)
Manufacturing PMI: 49.4 vs 47.3 prior
Services PMI contracted below 50
China exposure remains key risk
RBA maintains restrictive stance
NZD - VERY WEAK (unchanged)
Manufacturing PMI: 45.8 (20-month contraction)
RBNZ cut 50 bps to 4.25%
Business confidence deteriorating
Further cuts expected Q1 2025
USD - VERY STRONG
The dollar maintains exceptional strength supported by robust economic data and hawkish Fed positioning. Services sector expansion at 57.0 marks a 32-month high, while core inflation remains sticky above target.
Dominant Theme: Trump policy repricing drives yields higher
Emerging Theme: Growing possibility of delayed Fed cuts into 2025
Market Forecasts & Technical Analysis
DXY Forecast: 105.46 by Q4 2024 (Trading Economics)
US 10Y Yield: 4.38% target
S&P 500: 5,836.62 points projected
COT Data: Asset managers heavily long, suggesting potential consolidation
Key Events (Dec 1-7)
Core PCE Price Index (Dec 4, 08:30 EST)
ISM Services PMI (Dec 5, 10:00 EST)
Employment Report (Dec 6, 08:30 EST)
Consumer Credit (Dec 7, 15:00 EST)
CHF - STRONG
Switzerland's robust fundamentals remain intact with record-low inflation at 0.6% and persistent trade surpluses. SNB credibility in managing currency pressures provides additional support, though intervention risks grow as key levels approach.
Dominant Theme: Safe-haven flows intensify amid German political crisis
Emerging Theme: Mounting speculation over SNB intervention near 0.87
Market Forecasts & Technical Analysis
USD/CHF Forecast: 0.88 by Q4 2024 (Trading Economics)
SMI: 11,895.84 points projected
10Y Yield: 0.36% target
COT Data: Dealers net long while asset managers hold substantial shorts
Key Events (Dec 1-7)
CPI Data (Dec 4, 03:30 EST)
Unemployment Rate (Dec 7, 01:45 EST)
Foreign Currency Reserves (Dec 7, 03:00 EST)
Real Retail Sales (Dec 7, 03:30 EST)
EUR - MODERATELY STRONG
The euro's downgrade reflects deteriorating economic conditions amid German political uncertainty. Manufacturing PMI at 43.2 and services at 49.2 signal economic weakness, while inflation unexpectedly rose to 2.3%.
Dominant Theme: German coalition collapse impacts fiscal outlook
Emerging Theme: ECB policy path diverges from market expectations
Market Forecasts & Technical Analysis
EUR/USD Forecast: 1.07 by Q4 2024 (Trading Economics)
STOXX 50: 4,843.70 points projected
German 10Y: 2.35% target
COT Data: Heavy asset manager longs suggest consolidation potential
Key Events (Dec 1-7)
German CPI (Dec 4, 08:00 EST)
Eurozone Retail Sales (Dec 5, 05:00 EST)
ECB Lagarde Speech (Dec 6, 09:00 EST)
German Industrial Production (Dec 7, 02:00 EST)
GBP - MODERATELY WEAK
Sterling's downgrade reflects deteriorating economic data and uncertainty surrounding Labour's fiscal plans. Manufacturing PMI contracted to 48.6 while inflation rose to 2.3%, complicating BOE policy decisions.
Dominant Theme: Impact assessment of £40bn tax increase plan
Emerging Theme: Earlier BOE rate cuts possible on fiscal tightening
Market Forecasts & Technical Analysis
GBP/USD Forecast: 1.28 by Q4 2024 (Trading Economics)
FTSE 100: 8,183.37 points projected
10Y Gilt: 4.46% target
COT Data: Leveraged funds maintain long exposure despite risks
Key Events (Dec 1-7)
Services PMI Final (Dec 4, 04:30 EST)
Construction PMI (Dec 5, 04:30 EST)
Halifax House Prices (Dec 7, 02:30 EST)
Industrial Production (Dec 7, 04:30 EST)
JPY - NEUTRAL
Mixed fundamentals maintain neutral yen status as BOJ signals potential December action. Manufacturing PMI at 49.0 shows continued weakness, while services improved to 50.2 amid growing intervention speculation.
Dominant Theme: Intervention risk intensifies near 155.00
Emerging Theme: BOJ policy normalization speculation builds
Market Forecasts & Technical Analysis
USD/JPY Forecast: 155.48 by Q4 2024 (Trading Economics)
Nikkei 225: 38,923.13 points projected
10Y JGB: 0.95% target
COT Data: Heavy short positioning creates sharp reversal risk
Key Events (Dec 1-7)
Tokyo CPI (Dec 5, 18:30 EST)
Leading Economic Index (Dec 6, 00:00 EST)
Bank Lending (Dec 7, 18:50 EST)
Current Account (Dec 7, 18:50 EST)
CAD - WEAK
Recent 50bps BOC cut amplifies weakness as policy diverges from Fed hawkishness. GDP and employment data disappoint while oil price volatility adds pressure to the commodity-linked currency.
Dominant Theme: Growing monetary policy divergence with Fed
Emerging Theme: Trade policy uncertainty under Trump administration
Market Forecasts & Technical Analysis
USD/CAD Forecast: 1.40 by Q4 2024 (Trading Economics)
S&P/TSX: 24,131.83 points projected
10Y Yield: 3.20% target
COT Data: Dealers net long while asset managers maintain shorts
Key Events (Dec 1-7)
Building Permits (Dec 4, 08:30 EST)
Trade Balance (Dec 5, 08:30 EST)
BOC Rate Decision (Dec 6, 10:00 EST)
Employment Data (Dec 7, 08:30 EST)
AUD - VERY WEAK
Australian fundamentals deteriorate as manufacturing PMI contracts at 49.4 and services sector struggles. China exposure and trade uncertainty dominate the outlook amid growing regional risks.
Dominant Theme: China exposure amplifies Trump trade risks
Emerging Theme: Regional growth concerns intensify
Market Forecasts & Technical Analysis
AUD/USD Forecast: 0.65 by Q4 2024 (Trading Economics)
ASX 200: 8,165.90 points projected
10Y Yield: 4.61% target
COT Data: Heavy short positioning suggests bounce potential
Key Events (Dec 1-7)
RBA Rate Decision (Dec 5, 22:30 EST)
GDP Data (Dec 6, 19:30 EST)
Trade Balance (Dec 7, 19:30 EST)
Home Loans (Dec 7, 19:30 EST)
NZD - VERY WEAK
RBNZ's recent 50 bps cut and deteriorating economic data justify bottom ranking. Manufacturing PMI at 45.8 marks 20-month contraction streak while business confidence continues sliding.
Dominant Theme: RBNZ dovishness contrasts with global peers
Emerging Theme: Policy divergence with Fed widens further
Market Forecasts & Technical Analysis
NZD/USD Forecast: 0.59 by Q4 2024 (Trading Economics)
NZX 50: 12,516.35 points projected
10Y Yield: 4.37% target
COT Data: Heavy shorts create covering risk on positive surprises
Key Events (Dec 1-7)
Terms of Trade (Dec 4, 16:45 EST)
ANZ Commodity Prices (Dec 5, 13:00 EST)
Manufacturing Sales (Dec 7, 16:45 EST)
Card Spending (Dec 7, 16:45 EST)
CONCLUSION
Critical Market Events (Dec 1-7)
US Core PCE (Dec 4, 08:30 EST) - Fed policy implications
RBA Rate Decision (Dec 5, 22:30 EST) - Forward guidance focus
BOC Rate Decision (Dec 6, 10:00 EST) - Policy path assessment
US Employment Report (Dec 6, 08:30 EST) - Labor market health
German Industrial Data (Dec 6, 04:00 EST) - Economic assessment