U.S equities' positive performance dominated last week, as major indices staged a multi-day winning streak. The decisive rally helped create one of the strongest November turnarounds on record despite a shorter week.
The dollar attempted to bounce but remained the weakest G10 performer on the week, followed by the yen and Swiss franc. The Singapore dollar held its ground against both the Swiss franc and British pound.
The US dollar failed to keep above the key psychological level of 100 on the index. The primary catalyst for this decline is fundamental – the Fed signaling a December rate cut.
Macro factors rather than micro ones drove the market mood shift. A string of data points cooled hard-landing fears while reinforcing the case for easier policy into year-end. Seasonality added psychological support: historically, equities often bottom in late November before the so‑called Santa rally, and this year’s price action closely tracked that script.
Liquidity conditions were thin, and a major technical incident briefly stole the spotlight. When traders returned from Thanksgiving, they found several key futures and FX venues offline after a cooling failure at one of CME Group's data centers. Trading on Globex futures and options, EBS FX, and BMD markets was halted for several hours before being restored, with CME warning that price adjustments could take time to normalize.
It was a highly unusual disruption to market operations, underscoring the fragility of technological advancements and their impact on the trading infrastructure.
Pairs In Focus
1. NZD JPY
After five full months of range trading, this pair has finally broken out, closing above a key level of 89 and rejecting the pullback.
NZD/JPY daily chart, source: TradingView
Looking forward, as long as it persists with this bullish momentum above 89, it is expected that it will continue higher, eventually challenging the resistance from 2024 at 92.
2. EUR AUD
The Australian dollar went on a tear with a recovery of commodity prices. EUR / AUD has been in a broadening pattern since early July.
EUR AUD daily chart, Source: TradingView
A rejection from the key level in the middle indicates a potential test of support around 1.76. A further breakdown could signal a bearish resolution of the pattern, with considerable downside potential.
The Week Ahead
The coming week sets up as a critical test of whether the emerging December-cut narrative can survive a heavier macro and political calendar. With markets now pricing a more dovish Fed path and equities leaning into the Santa-rally playbook, investors face a trio of potential catalysts: high-profile U.S. data, shifting inflation dynamics abroad, and rising political noise in Washington.
Domestically, attention will center on the ISM manufacturing and services prints, along with other key releases that feed directly into the Fed’s reaction function. After a decisive risk-on move and a weakened dollar, any upside surprises in activity or pricing components could cool rate-cut optimism and spark a tactical squeeze higher in yields and the greenback. Conversely, softer readings would validate the recent rally in equities and keep pressure on the dollar, particularly against high-beta FX like the kiwi and Aussie.
Friday’s Non-Farm Payroll will be the first on-schedule release since September. The expectations are for a modest rebound from a soft prior print. A strong upside surprise could push markets to delay their rate-cut timeline, pressuring equities at the margin and lifting the dollar. A downside miss, by contrast, would likely extend the current pro‑risk, anti‑dollar bias.
Note: Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. Singapore Forex Club is not responsible for any financial decisions based on this article's contents. Readers may use this data for information and educational purposes only.
