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The USD is trading steadily with limited changes today, with the DXY index close to the 200-day moving average and most of the FX major are relatively stable. Bond markets are slightly stronger. The USD's growth potential is limited due to weak economic signs and typically negative December trends. Today's key employment data may reflect a weakening labor market, as recent JOLTS data shows fewer job openings and a trend towards increased job scarcity.
The CAD is underperforming in today's session, affected by mixed risk sentiments and commodity prices. Limited domestic news and high spreads are favoring the USD. The significant US/Canada 2Y spread, around 50bps, limits CAD's rebound potential without other factors. However, the current spot trading below fair value (1.3691) suggests potential for an upward shift. Observe USD/CAD trends.
The EUR fell to retest its low from yesterday in the European session's beginning. ECB member Schnabel's dovish remarks, suggesting fewer rate hikes due to a significant inflation drop, aligned with the EUR's lowest point today. However, the currency stabilized after upward revisions in Eurozone Services and Composite PMI for November, boosted by strong German Services, and higher-than-expected ECB Inflation Expectations for October, remaining at 4.0% over a one-year horizon.
Revised UK Services and Composite PMI data for November, showing increases to 50.9 and 50.7 respectively, further distancing from the 50 mark, contributed to sterling's rise in overnight trading. Additionally, the British Retail Consortium reported a 2.6% year-over-year increase in like-for-like retail sales for November, matching October's rate, indicating continued resilience among UK consumers.
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