Action Insight

Dollar fell to a one-month low on Wednesday as markets reassessed Democratic control of Congress. Dollar Index dropped 0.6% toward 101.27, weaker against all seven other major currencies, while the US 10-year yield declined about 5bps toward 4.917% and the 2-year eased about 3bps to 4.602%. US equity futures recovered sharply from overnight election-driven losses, led by traditional sectors rather than technology.

The Nikkei 225 plunged 4.84% to 60,030.10, its lowest since May, after the US midterms, then rebounded toward 61,944 to cut its loss to about 1.8%. The reversal leaves open whether it was a knee-jerk reaction or an AI reset, with key support at 59,072–59,332 and resistance at 64,831.29.

Dollar lacked clear direction on Tuesday as investors approached the US midterm elections amid renewed technology-sector weakness, AI financing concerns and Middle East uncertainty. Dollar Index hovered around 101.84, fourth among the eight major currencies on the ActionForex heat map, with NZD and CAD leading gains while Yen underperformed all seven counterparts and Australian Dollar fell after the RBA’s 6–3 hike to 4.85%.

Silver is falling more than 3% today, erasing Monday's entire recovery, while oil, Treasury yields and the Dollar offered little explanation. The Gold/Silver ratio surged toward 80 (79.6), and weakness in Nasdaq, Asian tech shares and copper points to broader risk reduction, though the link remains unconfirmed.

The RBA raised its cash rate 25bps to 4.85% on a split 6–3 vote, dropped its explicit tightening bias and signalled a pause for assessment, so the Australian Dollar fell despite sharply higher inflation forecasts. AUD/CAD broke structural support at 0.9778, and the next tests are 0.9722 and the 55-week EMA near 0.9660.

Dollar traded without a clear direction during Monday’s European session, even though CME FedWatch showed the probability of a December 25bps hike rising from 70.7% at Friday’s settlement to 76.6%. The US 2-year Treasury yield was little changed around 4.59%, the 10-year eased toward 4.92%, and Brent crude fell toward $108 on reports that Washington and Tehran were exploring diplomatic options.

Gold plunged 3.61% on Friday to 3,875.19, its first decisive daily close below $4,000, as Fed-led global tightening and liquidation-style selling converged. Monday's bounce toward 3,907 looks like relief within an established downtrend, with resistance at 4,083.41 and the next downside objective at 3,748.81.

The RBA (4.60% to 4.85%, 81.2% priced) and the BoE (3.75% to 4.00%, 94.4% priced) are both expected to hike this week, so GBP/AUD will hinge on new forecasts and guidance beyond November rather than the hikes themselves. The cross remains inside its 1.8533–1.9360 six-month range.

Friday's 2.86% Nasdaq plunge and an 8.24% semiconductor-ETF drop extended a two-week AI-driven selloff that's now reaching corporate credit assessments—S&P Global cut Meta's outlook to negative. With Gold, Silver and Bitcoin all falling alongside tech even as Treasury yields drop, Nasdaq's 25,036.33, S&P 500's 7,507.77 and the 10-year yield's 4.815% are the critical tests for whether this becomes a broader correction.

Dollar weakened against all seven major currencies on Friday as markets scaled back expectations for Fed tightening beyond the anticipated December rate increase. Dollar Index fell from around 102.30 on Thursday afternoon to 101.69 by Friday’s European session, a decline of approximately 0.6%.

Gold and Silver kept falling Friday even as US Treasury yields and the Dollar both declined—a break from the usual macro playbook. With tech stocks pressured by AI-spending concerns and crypto unsettled by the Binance breach, position-cutting across volatile assets is a plausible explanation, though not yet a confirmed one. Gold's 3,942.71 and Silver's $50 level are the next tests.

Two unrelated shocks converged on speculative assets: disappointing AI capex returns sent Alphabet down 12.64% and dragged Nasdaq, Nikkei and Asian semiconductors lower, while a ~$6.3B Binance security breach pushed Bitcoin toward $77,000. A falling Treasury yield hints at mild spillover, but broader equity performance stops short of confirming a generalized risk-off move—Nasdaq's 25,802.96, Nikkei's 61,462.61 and Bitcoin's $75,000–$76,000 zone are the levels that will decide if it deepens.

Euro fell against most major currencies on Thursday as the ECB’s cautious hold at 2.50% and President Christine Lagarde’s announcement of an early departure coincided with declining Eurozone bond yields. EUR/GBP broke below last week’s low, although EUR/USD and EUR/CHF have yet to confirm a broader breakdown.

EUR/CAD broke to a 15-month low after the BoC hiked to 2.50% and sharply revised its inflation forecast higher, reinforcing a Canadian Dollar rally that was already underway. With OIS pricing ~52% odds of a December follow-up hike and the cross testing 1.5414 support, a break opens the door toward the psychological 1.5000 level.

Gold traded around $4,040 Thursday, showing little lasting reaction to the Fed's expected hold at 3.75–4.00%—even after Governor Lisa Cook's surprise dissent for an immediate hike. With December tightening already 88% priced, today's US Q3 GDP and PCE inflation data are the next real catalyst for whether $3,975.49 support holds or gives way toward $3,942.71 and below.

Sterling and UK gilts showed little reaction to Chancellor John Healey’s Budget, despite higher borrowing forecasts and a reduction in fiscal headroom. The remaining buffer against the fiscal rule fell from £23.6B in March to £15B, broadly matching market expectations. Attention is shifting to today’s Fed decision, where a hold is overwhelmingly priced at 90.6%, but the voting split could reveal whether pressure for faster tightening is building.

AUD/NZD surged through 1.2489/93 resistance after two policy shocks 30 minutes apart: Australia's CPI jumped to 4.3%, reinforcing a November RBA hike, while the RBNZ unexpectedly held at 2.75% in a narrow 4–3 vote. The move is overwhelmingly an NZD story—not an AUD one—with the cross now targeting 1.2624 and potentially 1.2845.

Euro returned to the bottom of the major-currency ranking on Tuesday as renewed pressure on French government bonds partly reversed Monday’s relief. France’s 10-year yield rose 5.2bps to 4.955% while the German Bund yield fell 3.1bps to 3.339%, widening the OAT–Bund spread from around 153bps to 162bps. Spanish, British and US yields also declined, so the move was French-specific.

Moody's kept France's Aa3 rating with a negative outlook, and French bonds rallied Monday—yet Euro saw little relief, with EUR/GBP and EUR/CHF still trading near key support. The narrowing OAT-Bund spread hasn't translated into a Euro rebound, suggesting markets still see France's fiscal risk as unresolved rather than cleared.

Global financial markets face an unusually concentrated series of catalysts this week: the RBNZ, BoC and Fed decide on Wednesday, the ECB on Thursday and the BoJ on Friday, alongside earnings from Alphabet, Microsoft, Amazon and Intel, key inflation and growth data, and renewed geopolitical uncertainty around oil supplies. US 10-year Treasury yields are hovering around 5%.