Global Market Snapshot 16th December 2024

The market is focusing on the actions of central banks and the performance of economic data from various countries. The Australian dollar is under pressure due to stronger U.S. dollar driven by U.S. PPI data, but Australia’s employment data provided some support. EUR/GBP has risen for two consecutive days influenced by UK and German data, but the prospect of an ECB rate cut limits its gains. The Japanese yen is supported by risk-off sentiment, though its gains are limited.

USDJPY The Japanese yen is supported by safe-haven demand, mainly due to geopolitical tensions and market concerns over trade conditions. However, the yen’s gains are somewhat limited as the market broadly expects the Bank of Japan not to raise interest rates at this week’s policy meeting. Last Friday, the Bank of Japan released the Tankan Large Manufacturing Index, which rose to 14 in the fourth quarter, marking its highest level since March 2022.

GBPUSD The GBP/USD exchange rate is around 1.2637, continuing its downward trend. This movement is driven by key UK economic data falling short of expectations. The UK’s GDP for October contracted by 0.1% month-on-month, missing the market forecast of 0.1% growth, while industrial production fell by 0.6% month-on-month, against an expected increase of 0.3%. However, the downside pressure on the pound appears limited, as the market anticipates that the Bank of England may take a more cautious approach to policy easing.

EURUSD On December 12, the European Central Bank (ECB) lowered the deposit facility rate by 25 basis points to 3.0%, in line with market expectations. At the same time, the main refinancing operations rate was also reduced by 25 basis points to 3.15%. This marks the ECB’s third consecutive 25-basis-point rate cut and the fourth cut this year. However, the euro’s upside potential may be limited, as ECB President Christine Lagarde stated that officials had discussed the possibility of a 50-basis-point rate cut. Lagarde noted that “the risks to economic growth are tilted to the downside” .

AUDUSD pair is trading with slight fluctuations. The potential tariff threats from the Trump administration have driven the U.S. dollar broadly stronger, creating resistance for the AUD/USD exchange rate. Additionally, on December 12, the Australian dollar received some support from the release of domestic employment data. Seasonally adjusted employment increased by 35,600, bringing the total number of employed persons in November to 14.5355 million. Meanwhile, the unemployment rate fell to 3.9%, the lowest since March, and below the market expectation of 4.2%.

BTC Over the weekend, Bitcoin-investors were encouraged by the admission of MicroStrategy, which holds the biggest Bitcoin treasury among listed companies, to the Nasdaq 100 Index, helping Bitcoin to strike the level of $104,500.