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Currency market fireworks remain subdued as traders process conflicting signals

Good morning. Foreign exchange markets are caught between conflicting forces as precious metals extend their decline and a sell-off in technology stocks shows signs of exhaustion. Gold and silver prices are tumbling once again, North American equity futures are setting up for modest gains at the open, and the dollar is advancing against most of its major peers amid choppy trading conditions. The pound is down sharply after the Bank of England narrowly avoided cutting rates in its latest decision, shocking observers expecting a far more neutral outcome. Four of nine Monetary Policy Committee members voted to cut rates—well beyond...

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Precious metals plunge triggers global selloff

A slow-motion flight to safety is underway across the currency markets this morning, as a bloodbath in the precious metals complex extends into a second week. Equity futures are pointing to further losses at the North American open, the US dollar is climbing against all of its major rivals as traders exit risky positions across a range of asset classes, and commodity-sensitive currencies like the Australian dollar, Canadian dollar, and Swiss franc are coming under selling pressure. Gold and silver prices suffered their biggest selloff in years on Friday, prompting many observers to suggest that the “debasement trade” was in...

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Relief rally supports additional market gains

Markets look set to extend gains for a second day after President Donald Trump ruled out the use of force and retreated from threats to seize Greenland through economic coercion. The dollar is firmer, yields are steadier, and stock futures are pointing to a stronger open as a relief rally plays out across asset classes. Measures of implied volatility in Treasury, equity, and foreign exchange markets are all coming down as investors reduce protection against tail exposures, and risk-sensitive currencies like the Australian and Canadian dollars are outperforming their safe-haven brethren. Late yesterday, Trump said he would not proceed with...

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Fundamental drivers reassert themselves in currency markets

Good morning. After a series of early-week distractions, currency market drivers are shifting back toward economic fundamentals today, with mixed US data keeping yields within tight ranges and the Japanese yen becoming a key focal point ahead of a potential snap election. Equity futures are setting up for a negative open after modest losses in yesterday’s session, Treasury yields are holding firm across the curve, and the dollar is trading almost imperceptibly lower against a basket of its major counterparts. American consumers continued to engage in retail therapy in November. According to figures published by the Census Bureau this morning,...

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Mixed data supports dollar in countdown to tomorrow’s payrolls report

Happy Thursday. The dollar is extending its advance for a third session after yesterday’s data underscored the US economy’s resilience, denting bearish conviction. Most major currency pairs remain rangebound, with the pound, euro and yen all holding broadly neutral technical positions against the greenback. Treasury yields are slightly higher, while equity markets are set to open a bit lower as investors weigh the Trump administration’s latest threats to intervene in the housing and defence sectors. The latest Job Openings and Labor Turnover report delivered more evidence of a cooling in demand for workers, but layoffs remained low and the quits...

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