Author: Daniel Chang

UBS has forecasted that the USD/CNY exchange rate will climb to 7.5 by the end of the first half of 2025, citing persistent trade tensions between the United States and China as a driving factor. These tensions are expected to prompt Beijing to consider measures such as imposing tariffs on select U.S. goods and restricting the export of critical materials. However, UBS analysts believe these actions would primarily serve as symbolic gestures rather than significantly altering the trajectory of U.S.-China relations. Instead, a moderate depreciation of the Chinese Yuan (CNY) is viewed as a more pragmatic response to counterbalance the…

The U.S. dollar gained traction against major global currencies on Tuesday, buoyed by stronger-than-expected retail sales data and market anticipation of Federal Reserve policy adjustments. The Commerce Department reported a 0.7% rise in November retail sales, surpassing forecasts, with motor vehicle and online purchases driving the increase. Investors are closely watching the Federal Reserve’s upcoming decision, with a 25-basis-point rate cut widely expected at the conclusion of its two-day policy meeting on Wednesday. According to the CME’s FedWatch tool, futures markets are pricing in a 97% probability of such a move. The U.S. dollar index, which measures the currency against…

A recent survey by Bank of America (BofA) suggests that the stock market may be approaching a critical turning point. The bank’s December Global Fund Manager Survey (FMS) highlights a sharp drop in cash levels among investors, reaching a three-year low, alongside a surge in bullish sentiment. These factors together signal a possible “sell” moment for risk assets. The survey revealed that average cash allocations among fund managers have decreased to just 3.9% of assets under management (AUM). This triggers BofA’s “FMS Cash Rule” indicator, which historically considers cash allocations at or below 4% as a warning sign for global…

The U.S. dollar edged higher against major currencies on Monday as investors prepared for a critical week of interest rate decisions from the Federal Reserve, Bank of Japan, Bank of England, and other major central banks. Markets anticipate a 97% chance that the Federal Reserve will lower interest rates by 25 basis points at the conclusion of its two-day meeting on Wednesday, according to CME’s FedWatch tool. U.S. Treasury yields reflected this sentiment, with the benchmark 10-year note yield slipping slightly to 4.391%. Analysts are closely watching whether the Fed’s expected rate cut will come with hawkish signals. Juan Perez,…

The Nasdaq Composite reached a record high on Monday, driven by strong gains in the tech sector as investors focused on the Federal Reserve’s final policy meeting of the year. By the close of trading, the Nasdaq rose 1.1% to finish at 20,173.74. The S&P 500 managed a modest gain of 0.4%, while the Dow Jones Industrial Average slipped by 0.3%. Broadcom was one of the standout performers, jumping over 10%. The chipmaker’s strong quarterly earnings last week have fueled optimism, pushing its market value up by more than $300 billion since Thursday. Tesla also hit a new record high…

Asian currencies slipped on Monday as the U.S. dollar held near a three-week high, with markets anticipating a U.S. Federal Reserve rate cut later this week. Mixed economic data from China added to concerns about the country’s sluggish economic recovery, further weighing on regional currencies. The Federal Reserve is expected to lower interest rates by 25 basis points this week, but expectations of a slower pace of rate cuts in 2025 have kept the dollar strong. The U.S. Dollar Index, though slightly lower in early Asian trading, remained close to its highest level in three weeks. The Chinese yuan weakened…

Asian stock markets fell on Monday as investors remained cautious ahead of the U.S. Federal Reserve’s upcoming interest rate decision. Chinese shares dropped sharply due to weaker-than-expected retail sales data, raising concerns about the strength of the world’s second-largest economy. The Federal Reserve is expected to cut its benchmark interest rate by 25 basis points on Wednesday. However, uncertainty about its long-term monetary policy persists as inflation continues to be a key challenge. U.S. stock index futures were muted during Asian trading hours, reflecting the cautious sentiment ahead of the Fed’s meeting. In China, the Shanghai Composite slipped by 0.1%,…

U.S. President-elect Donald Trump has extended an invitation to Chinese President Xi Jinping to attend his inauguration next month, according to a report from CBS News citing multiple sources. The invitation was reportedly sent in early November, shortly after the presidential election on November 5. However, it remains unclear whether Xi has accepted the offer. The Chinese embassy in Washington has not yet commented on the matter. In an interview with NBC News last Friday, Trump stated that he had a positive relationship with Xi, mentioning they had communicated as recently as this week. If Xi were to attend, it…

Reports suggest that China is considering weakening its currency, the yuan, next year to offset the impact of rising U.S. tariffs. According to Reuters, this possibility has already caused a slight drop in the yuan’s value against the dollar and has affected other Asian currencies that rely heavily on Chinese trade. The move highlights the risk of significant currency shifts amid ongoing trade tensions between the two largest economies. Analysts believe that allowing the yuan to depreciate could be a strategy to make Chinese exports more competitive by lowering their prices internationally. While some expected the yuan to weaken due…

On Thursday, the Brazilian real weakened against the U.S. dollar despite the central bank’s aggressive move to raise interest rates and hint at further hikes. After an initial gain of 1% during early trading, the real lost ground, closing down 0.9% at 6.01 per dollar. The currency’s decline coincided with a reversal in Brazil’s yield curve, where longer-term yields rose after an initial drop. Market uncertainty grew as political developments added pressure to the financial landscape. Presidential spokesman Paulo Pimenta revealed that President Luiz Inácio Lula da Silva plans to run for re-election in 2026, which intensified concerns among investors.…