Holiday Hangover: The Dollar’s Chill Moment
It’s the festive week in the U.S., but when you look at the USD/JPY ticker, the greenback is just hovering around 106.65—no big upswing or crash.
Why the Currency’s Cool?
- New Treasury Boss Alert: President‑elect Donald Trump announced Scott Bessent as his pick for Treasury Secretary.
- Fiscal Discipline on the Menu: Bessent’s mission is to trim the deficit to 3% of GDP by 2028. That’s a promise investors like when the runway’s solid.
- Tariff Tundra: He’s not giving up on tariffs or tax cuts, so the market holds its breath—could help or hurt cool‑gel global trade.
What’s the Investor Mood?
Think of the dollar as a tightrope walker. It’s steady because: 1) the new Secretary signals fiscal smartness, 2) there’s still chatter about a possible Fed rate cut, and 3) traders are waiting for mid‑week data.
Data Thursday: The Hot‑Spot
- October PCE — a key inflation gauge.
- Q3 GDP second estimate.
- Weekly jobless claims.
These numbers will either make the dollar wink or sigh.
Globally, the Stocks Are Partying
Japanese and European markets give the U.S. a friendly nudge, and the futures look bullish. It’s all hand‑holding for the Fed’s next rate cut, which is expected to be a 25‑basis‑point dip with a 56.1% chance.
Fingers on the Pulse
While higher rates keep the dollar braced for now, the looming ‘rate cut talk’ plus trade friction could re‑ignite volatility. And with the holiday swirling, data surprises could swing the market like a carnival ride.
Bottom Line
The greenback’s early‑week steadiness is a balancing act: Bessent’s promise of fiscal sobriety vs. the uncertain impact of tariffs and potential monetary shifts. Stick around—each new report is a cliff‑hanger with the dollar on the line.
