U.S. Dollar Hits Two-Month High as Oil, Treasury Yields Surge 
Oil Prices Fall on U.S.-Iran Hormuz Deal Hopes 
US Stock Futures Fall as Treasury Yields Surge Ahead of Trump-Xi Summit 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Asian Currencies Mixed as Dollar Holds Near Two-Month High 
Canadian Dollar Faces Pressure as Fed-BoC Policy Gap Widens 
Asian Stocks Fall as Bond Yields Surge Ahead of Trump-Xi Summit 
Trump, Xi Focus on Trade and AI at White House Summit 
Wall Street Ends Flat as Oil, Treasury Yields and Fed Jitters Rattle Markets 
US Comfortable With Canada Trade Standoff as Import Bans Loom 
Fed Unveils Stablecoin Rules Under GENIUS Act 
Japanese Bank Stocks Surge as Bond Yields Fuel Rate Hike Bets 
China’s ‘Lipstick King’ Says AI Won’t Replace Livestream Hosts 
U.S. Treasury Yields Surge as 30-Year Hits 22-Year High 
Dollar Holds Near Two-Month High as Yen Approaches 160 
Japanese Yen Rebounds as Trump Flags Currency Weakness 
Japan Private-Sector Growth Slows as Domestic Demand Weakens 
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The U.S. dollar remained broadly steady on Wednesday as global markets turned their attention to shifting interest rate expectations and a renewed appetite for risk. Investors are increasingly positioning for potential U.S. rate cuts in 2026, a trend that could weigh on the greenback over the coming years.
The Australian dollar briefly reached a three-week high at $0.6576 before easing after GDP figures came in slightly below forecasts. Meanwhile, the euro gained momentum, breaking above its 50-day moving average following euro zone inflation data that was marginally stronger than expected. Early in the Asian session, the euro traded around $1.1629, supported by improved sentiment.
A major driver of market confidence was bitcoin’s sharp rebound. The world’s largest cryptocurrency surged roughly 6%, climbing past $91,000 and encouraging broader risk-taking among investors.
The Japanese yen held steady at 155.70 per dollar, buoyed by growing expectations of a domestic rate hike this month. This stands in contrast to the United States, where markets are pricing in an 85% chance of a Federal Reserve rate cut next week. Sterling traded at $1.3222, the Swiss franc remained firm at 0.8022 per dollar, and the New Zealand dollar hovered near $0.5730.
Looking ahead, analysts expect about 90 basis points of U.S. rate cuts before the end of 2026. Speculation is also building that White House economic adviser Kevin Hassett—known for favoring lower interest rates—could be nominated as the next Fed chair, a move that could further pressure the dollar.
Deutsche Bank strategist Tim Baker noted that December has historically been a weak month for the greenback, projecting a potential 2% decline. Analysts at OCBC share a similar outlook, anticipating a softer dollar as U.S. rate cuts narrow global yield differentials. Market veteran Brent Donnelly summed up sentiment, highlighting stretched dollar positioning and seasonal weakness, and revealing bullish positions on EUR/USD and NZD/USD pairs.
