US equity markets took a breather, following huge gains for November, while markets considered the prospects for monetary policy in the final month of the year. The customary ‘Santa Claus’ rally would be expected with all the signs pointed to the right conditions. Confidence is high in equity and bond markets, as speculation that the Fed will now turn to cutting interest rates in 2024. Currencies are another matter, with other measures of wealth surging, crypto-currencies charging and Gold hitting record highs. The US Dollar has been regaining some lost ground, with the EUR trading 1.0800, while the GBP slipped to 1.2600.
The rising reserve pushed the AUD back towards 0.6600, while the NZD retreated to 0.6150. Local markets will be focused on the RBA rate decision, where they are expected to hold rates steady, following the surprise Melbourne Cup Day rate rise. The language will be hawkish, so expect some further upward pressure on the currency.
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