N America Summary and Highlights 30 Dec
USD edged higher in NY in thin trading.
N America Session
Before the FOMC minutes release the USD edged up and then saw little reaction on the minutes. FX traders were watch 2yr Treasury and only a 1bps decline was seen. The December minutes leave the impression that the bias is towards more cuts in 2026, but likely after a policy hold in the near-term. However, this is already discounted in money market futures and attention now switched to the December numbers, with payrolls on January 9.
President Donald Trump comments yesterday also attracting some attention. The optimism on a near-term Ukraine peace deal is not being shared by the market, with Russia and Ukraine still far apart of territory and the issue of security guarantees. Any surprise peace deal could help European gas prices lower, which would help a European recovery and the EUR.
AUD drifted lower in the U.S. to reverse gains seen in Asia. AUD remains one of the favourite picks for 2026, given the RBA could hike as the Fed cuts. Additionally, attitude towards China and its assets are becoming less negative, while the AUD has lagged other majors in 2025.
Europe Session
Traders in Europe are waiting for the FOMC minutes for the December meeting for further clues on 2026 Fed policy. Any dovish noises in the minutes could reawaken talk of an earlier cut and weigh on the USD. EUR/USD and USD/JPY remain rangebound in post-Christmas trade, with traders also looking at what will be the major catalyst in 2026. Bias is for USD to drift down, but for AI/risk on to help the USD and make this a choppy process. Spanish CPI had little impact as it came in line with expectations.
Gold and Silver made modest gains after the Dec 29 sharp selloff, which traders feel was profit-taking by spec longs. Though this is isolated, any renewed sharp selloff is seen favouring traditional safe haven such as CHF and JPY.