Dollar Rebounds in Asian Session as Trump Warns BRICS Nations

The U.S. dollar rebounds against the yen and pound, driven by Trump’s warning to the BRICS Nations; Asian stocks show gains.

The U.S. dollar recovered from recent lows during the Asian trading session, buoyed by President-elect Donald Trump’s warning to BRICS nations against seeking alternatives to the dollar. The greenback rose 0.5% to 150.53 yen and gained against the euro and British pound. Despite ongoing speculation about Federal Reserve rate cuts, this resurgence underscores the currency’s resilience.

Asian Equities Rally on Strong Chinese Data
Asian stock markets closed with mixed but largely positive results. Hong Kong’s Hang Seng climbed 0.9%, while mainland China’s blue-chip index added 0.6%, supported by robust Chinese manufacturing data. Japan’s Nikkei, however, slipped 0.3%, with Fast Retailing shares contributing to the decline.

Impact on European and U.S. Markets
The dollar’s upward momentum could exert pressure on European currencies in the upcoming session. The euro may face additional headwinds due to concerns over French political stability and potential European Central Bank (ECB) rate cuts. Analysts expect continued market volatility, with the Dollar Index (DXY) and U.S. Treasury yields as key indicators.

ISM Manufacturing PMI to Shape DXY and Gold
The Institute for Supply Management (ISM) will release its Manufacturing Purchasing Managers’ Index (PMI) today at 3:00 PM GMT. A reading below the previous 46.5 figure would signal sustained contraction, likely weighing on the dollar and boosting gold prices. Conversely, a PMI above 50 could lift the DXY.

Dollar Rebounds in Asian Session as Trump Warns BRICS Nations

Gold on Track for Gains
Gold remains an investor favorite amid global uncertainties, with prices trending upward toward a forecasted $3,000 per ounce by mid-2025. Today’s ISM data could catalyze further moves, with weaker dollar sentiment potentially driving gold higher in the short term.

Market Sentiment on Other Key Currencies

• Australian Dollar (AUD): Weak bullish sentiment persists in the absence of major news, with technical levels of 0.6479 (support) and 0.6540 (resistance).
• New Zealand Dollar (NZD): Medium bullish bias, similarly driven by technical factors.
• Japanese Yen (JPY): Technical resistance at 151.51 may limit dollar gains.
• Euro (EUR): Medium bearish outlook as European geopolitical and economic concerns weigh on sentiment.
• Swiss Franc (CHF): Medium bullish bias; a haven asset amid fluctuating global conditions.
• British Pound (GBP): Medium bullish bias, though limited by economic uncertainties.
• Canadian Dollar (CAD): Weak bearish outlook, reflecting subdued oil prices and rate cut expectations.

Oil Markets Stable Amid Quiet News Cycle
Oil prices are expected to remain steady, with support at $66.48 and resistance at $72.78. Traders will focus on broader economic signals and technical movements without major developments.

Looking Ahead
As markets transition to the European and U.S. sessions, attention will remain on geopolitical developments, economic data, and central bank policies. Traders should brace for potential volatility driven by the ISM PMI report and shifts in risk sentiment.

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