RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Singapore Maintains Steady Monetary Outlook as Positive Output Gap Persists into 2025 
Japan’s Rising Inflation Strengthens Case for a Near-Term BOJ Rate Hike 
Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows 
2025 Market Outlook: Key January Events to Watch 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
 forwards - EconoTimes)
We maintain a neutral forecast for EURUSD over the coming quarter, and indeed continue to recommend tactical short option trades in EURUSD for the next month or two on the basis of some fundamental driving forces:
The rationale:
1) Poor European growth is likely to matter slightly more than a now-diffident Fed, and
2) The Fed may be on hold but the absolute level of USD interest rates remains supportive of short term capital flows to USD.
Furthermore, we continue to indicate a mildly constructive forecast for the euro based on the key assumption that growth rebounds above 1.5%. This together with a still robust underlying balance of payments position should allow cautious mean-reversion higher in a is a modestly undervalued EUR (the EUR REER is 4.5% cheap to a 20Y average whereas the dollar is 3.5% expensive).
For shorter-term horizons (up to 3 months), we recommend hedging USD-denominated expenses via FX forwards, as we see a risk of more USD strength. For longer-term maturities (over 3 months), consider incorporating optionality, which enables one to gain from a EURUSD increase; this could be done by means of knock-in forwards, which allow one to sell EURUSD above the current spot should USD weaken over time (as per our call), while still securing a worst-case rate.
Alternatively, on hedging grounds ahead of Fed’s monetary policy that is scheduled for this week who is most likely to maintain status quo in its monetary policy, we advocate shorting futures contracts of mid-month tenors as the underlying spot FX likely to target southwards 1.1175 levels in the medium term.
Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position. Courtesy: JPM & Danske
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 70 levels (which is bullish), while hourly USD spot index was at -96 (bearish) while articulating at (08:24 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
