06/12/2024
Written by: Ian Morley
Summary:
The GBP/USD reached its highest level in 13 months yesterday, while the EUR/USD hit a new 9-month peak as the trend of selling off the US dollar persisted. However, it is important to observe that EUR/USD appears particularly overbought considering the significant gains made in a short period, indicating the potential for a pullback.
Outlook:
The market sentiment continues to favour selling the US dollar, with the USD index now at its lowest level since December 2023. Many market commentators suggest that this wave of USD selling might persist. However, as mentioned earlier, the dollar does seem relatively oversold, given the magnitude of its recent decline. Additionally, equity markets have recovered much of their earlier losses, hinting that the current risk appetite may begin to wane. The main focus today will be on the release of the Federal Reserve minutes this evening.