Another session of sustained appetite for the Dollar and cautious reserve against the Euro.

Employment figures in the USA are very robust (full employment persists), while they are disappointing in Europe (particularly Germany).
And the head of the BdF -Villeroy de Galhau- estimates that the ECB could lower its key rate to 2% by next July.
Reminder: the FED could proceed with its 1st easing at the end of July.

This calendar dimension confers a clear earnings advantage on the dollar, which has been the preferred scenario since mid-December (and the FED's about-face on inflation).

The $-Index soared to 109.39 (+0.6%, retracing its January 2 high) before catching its breath at 109.05 (+0.33%).
The euro fell to a new annual low of 1.0270, and this evening is back above 1.0300, with a -0.3% gap to 1.0310%.

One of the 'facts of the day' is the -1% plunge in the pound to 1.2350, as British debt is in crisis.

Gilts are literally disintegrating: +19 basis points to 4.873%, the first time this has happened since autumn 1998.
This is beginning to resemble an Italian-style situation in 2011, and could turn into a Greek-style crisis if the Bank of England doesn't put out the fire quickly, with the help of the government (without which it won't be able to do anything on its own).

The day was also rich in statistics from the USA: the latest was new jobless claims in the US, which fell by -10,000 to 201,000 in the week to December.000 to 201,000 in the week ending December 30, according to the Labor Department

. The four-week moving average - more representative of the underlying trend - came in at 213,000, down sharply by -10,250 on the previous week.

Finally, the number of people receiving regular benefits rose by 33,000 to 1,867,000 in the week ending December 23, the most recent period available for this statistic.

Another eagerly-awaited figure 48 hours ahead of the NFP was the result of the ADP survey of private-sector job creation: only 122,000 jobs were created in the US in December, slightly below consensus (130,000 according to Jefferies).

Traders are not expecting the Fed to make another rate cut before June, and a second by the end of the year, but the minutes of the December 17-18 meeting published this evening could shed new light on the Fed's intentions, and even rekindle speculation of three rate cuts by 2025.

In Europe, the figures are worrying and likely to prompt the ECB to cut rates in the 1st half of the year: industrial orders fell by -5.4% in November in Germany, according to Destatis.

In the EU, the economic sentiment indicator (ESI) fell by -1.7 points to 94.5, and in the eurozone by -1.9 points to 93.7, according to the results of the European Commission's monthly survey.

The Employment Expectations Indicator (EEI) also fell in both zones (-1 point to 98.4 in the EU, -1.4 point to 97.3 in the eurozone), with both indices scoring below their long-term average of 100.
In France, "household sentiment" darkened further in December, returning to values worthy of the Covid lockdown.

Copyright (c) 2025 CercleFinance.com. All rights reserved.