On Monday morning (November 25th) in the Asian market, the US dollar index opened lower and fell, currently trading at 106.93, a decrease of about 0.5%, giving up all the losses from last Friday. As President elect Trump nominated well-known investor Scott Bessent as the US Treasury Secretary, Bessent is a senior figure and fiscal conservative on Wall Street, and the market's concerns about Trump's future strict trade measures have cooled down.

Moreover, the candidate for US Treasury Secretary has also reassured the bond market, thereby lowering yields and weakening some of the interest rate advantages of the US dollar. The yield of 10-year US treasury bond bonds fell to 4.330% from 4.412% late last Friday, the lowest since November 12.

Analysts believe that Besent is respected by Wall Street and advocates for tax reform and deregulation, with the possibility of reducing severe tariffs; The economy and market may remain stable, and nominations may be beneficial for the stock and bond markets, potentially limiting US bond yields and the US dollar.

However, Besent has also publicly supported a strong dollar and supported tariffs, indicating that any pullback in the dollar could be short-lived.

Ray Attrill, head of foreign exchange research at the National Australia Bank (NAB), said: 'After news of Trump's election victory came out, Beckett publicly praised the strengthening of the US dollar, so I admit that some people believe that the weakening of the dollar is due to his appointment, which confuses me a bit. He is an open fiscal hawk, so perhaps this is related, but in this regard, seeing is believing.'“

Analysts point out that there may be some consolidation in the US dollar index, as it has risen for eight consecutive weeks, only the third time in this century, and many technical indicators are showing overbought.

Due to the continued cooling of market expectations for the Federal Reserve's December interest rate cut, the US dollar index hit a two-year high of 108.09 last Friday.

At the same time, futures market pricing shows that the likelihood of the Federal Reserve cutting interest rates by 25 basis points in December has decreased from 72% a month ago to 52%.

The market has responded positively to Beisen, with an E-mini S&P futures index of+0.4%. There is no frontline data or speeches from Federal Reserve officials in the United States today, so Beisen News may dominate the market.

From a technical perspective, the moving averages on the 5th, 10th, and 21st have risen, and the momentum indicator is neutral. The bullish trend pattern of the Bollinger Bands on the 21st is still continuing.

The Asian high of 107.49 and the trend high of 108.09 from last Friday are the first and second resistance lines

The 10 day moving average of 106.73 and last week's low of 106.07 are key supports.

Affected by the decline of the US dollar, non US currencies generally rose on Monday. The USD/JPY is currently down 0.4% at 154.11, further away from its recent high of 156.76. Earlier, it fell to 153.81, a new low in nearly four trading days.

The EUR/USD rose 0.63% to $1.50481, previously hitting a high of 1.0500, breaking away from the two-year low of 1.0332 reached last Friday. The resistance levels are at 1.0555 and 1.0610, while the support levels are near the levels of 1.0195 and 1.0000.

On November 25th, there were 1.66 billion at 10440, 828 million at 10470, and 1.372 billion at 10485.

The euro was hit last Friday as the European Manufacturing Purchasing Managers' Index (PMI) survey showed widespread weakness, while the US survey unexpectedly rose.

This led to a sharp drop in the yield of European bonds, widening the gap between the yield of European bonds and that of US treasury bond bonds, which was good for the US dollar. The market also expects the European Central Bank to adopt more aggressive easing policies, with the possibility of a 50 basis point rate cut in December expected to rise to 59%.

At present, market pricing shows that the European Central Bank will cut interest rates by 154 basis points before the end of next year, while the Federal Reserve is expected to only cut interest rates by 65 basis points.

The UK retail sales data also disappointed, leading the market to believe that the possibility of the Bank of England cutting interest rates has increased, but the rate cut may occur in February instead of December.

This led to the GBP/USD hitting a six week low of $1.2486 last Friday. On Monday morning, the pound rebounded 0.5% to $1.2595, but still far below last week's high of $1.2714.

From a technical perspective, the daily momentum indicators of the pound are mixed, with the Bollinger Bands widening on the 21st and the 5-day, 10 day, and 21 day moving averages falling - showing a negative trend pattern

Last Friday's low of 1.2475 and May's low of 1.2446 are preliminary support levels; If it closes above last week's high of 1.2713, it will be a positive signal.

Other non US currencies have also generally risen, with the Australian dollar currently up 0.71% against the US dollar, trading around 0.6545; NZD/USD is currently up 0.48%, trading around 0.5862. Last Friday, the New Zealand dollar fell to 0.5815, the lowest since November 1, 2023.

There is relatively little economic data on this trading day. Pay attention to Germany's November IFO Business Sentiment Index and G7 Foreign Ministers' Meeting, further market interpretations of the US Treasury Secretary candidate, and news related to the Middle East geopolitical situation and the Russia Ukraine geopolitical situation,.

This week's forecast: US CPI data hits before Thanksgiving

Although the Thanksgiving holiday is approaching on Thursday, November 28th and market trading may decrease, this week's US data is very busy. On Tuesday, the Consumer Confidence Index, New Home Sales, Richmond Fed Manufacturing Index, and minutes of the Federal Open Market Committee (FOMC) meeting will be released. On Wednesday, the weekly initial jobless claims, durable goods orders, revised gross domestic product (GDP), personal income, and core personal consumption expenditure (PCE) price index (the Federal Reserve's preferred inflation indicator) will be released. Black Friday sales on November 29th will reveal consumer confidence.

The market generally expects the Reserve Bank of New Zealand to lower its official overnight repo rate (OCR), which is currently 4.75%, on Wednesday. Market pricing shows a 100% chance of a 50 basis point reduction and a 25% chance of a 75 basis point reduction. Most economists also expect that due to the still bleak economic outlook, the central bank will hint at the possibility of taking more easing measures in the future. Trade data and ANZ Bank's business outlook survey will also be released.

The data for Japan starts with the Producer Price Index (PPI) for the service sector on Tuesday, followed by the Tokyo Core Consumer Price Index (CPI), unemployment rate, industrial production, retail sales, and consumer confidence index on Friday, providing an overall overview of the economy.

The schedule of the eurozone is relatively low-key; The initial values of the Consumer and Business Sentiment Index and the Friday Consumer Price Reconciliation Index (HICP) may provide information for the European Central Bank's interest rate expectations. Germany will release the Ifo business sentiment survey on Monday, inflation data on Thursday, and retail sales on Friday.

In the UK, the Deputy Governor of the Bank of England, Lombardy, and the Monetary Policy Committee member, Dingla, will deliver speeches at the Bank of England Observer Meeting in London on Monday; There is no frontline data available in the UK this week.

The October CPI released by Australia on Wednesday may soften, and the cut-off mean of core inflation may drop to the high end of the 2-3% range of the Reserve Bank of Australia. On Thursday, the third quarter capital expenditures will be announced, and Reserve Bank of Australia Governor Brock will also give a speech. Canada will release its third quarter GDP on Friday, and Deputy Governor of the Bank of Canada, Mendes, will give a speech on Tuesday.