Daily Market Update

Dollar Losing Streak Continues, Global Mood Improves

November 21, 2023

With little on the economic calendar to drive price action yesterday, the United States Dollar traded in muted but slightly negative ranges across the board. 


With few exceptions, this trend is continuing today ahead of the release of the Federal Reserve’s minutes from its November 1 meeting. Headed for a fourth straight day of losses, albeit smaller this week, this marks the longest losing streak for USD in just over a month. Risk sentiment continued to rally around the world as reports from Chinese state media of a possible stimulus added a tinge of color to riskier assets and equities, and a possible “truce agreement” between Israel and Hamas that could clear the way for the release of some hostages further eased the global mood and depressed the Buck.Domestically, US treasuries rose a bit this morning to erase the year’s losses as signs of a cooling labor market and slowing inflation have traders adding to bets that the Federal Reserve may begin cutting interest rates sooner rather than later next year. Skepticism over the Fed’s ability to actually deliver the mythical ‘soft landing’ continues to grow as warning signs flash in the US economy and the global picture continues to dim as well.

FOMC minutes for November 1, due out this afternoon, will no doubt be scoured for clues as to where the members of the Committee truly believe the US economy is headed, and with that the fortunes of the Dollar as well. As it stands now, regardless of what Jerome Powell said publicly two weeks ago, investors do not expect another hike from the central bank and see chances of a cut as soon as March.


What to Watch Today…

  • FOMC Minutes, Tuesday 2 PM
  • US Durable Goods Orders, Wednesday 8:30 AM
  • US Preliminary November PMI, Friday 9:45AM
  • Holiday Hours: Weds, Nov 22 | 8:30a-5p EST; Thurs, Nov 23 | CLOSED; and Fri, Nov 24  | 8:30a-3p EST

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Pound Sterling is managing to eke out a bigger gain against USD than its European peers to the tune of 0.4% after a couple speakers from the Bank of England squashed ideas that the BoE would be the first major central bank to cut interest rates. Though any potential for one more hike was also taken off the table, expectations have shifted toward the first cut not coming until May. Catherine Mann in particular stressed the need, even as growth prospects remain “anemic,” for tighter monetary policy.


Japanese Yen this morning is continuing its impressive rally against USD and most other major currencies, gaining a further two-thirds of a percent overnight and marking its longest winning streak since July. APAC currencies as a whole got a boost overnight on news of potential Chinese stimulus for its ailing property sector as well as a suggestion that the PBoC is preparing to take a more active role in boosting Chinese Yuan prices against the Dollar in particular.


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