US Dollar rises ahead of key data

Chinese markets saw a surge in chipmaking industry post the government’s recommendation to reduce reliance on US-made chips. However, a decline in the Chinese services PMI to 51.5 from 52.0 highlighted slower growth in the sector, which could weigh on broader market sentiment.

In the US, markets remain cautious as traders assess potential economic risks tied to President Trump's renewed tariff threats against BRICS nations, which has bolstered the US Dollar Index.

Eurozone

EUR/USD traded modestly flat above 1.0500 in early European trading on Wednesday, maintaining its range-bound movement. The US Dollar remains broadly stable, limiting any significant directional moves for the pair. Meanwhile, political uncertainty in France weighs on the Euro, with the government facing a no-confidence vote. Traders are also focused on key economic data, including November PMI readings across Europe and the US, which may provide clearer cues for the pair's trajectory.

Commodities

Gold

Gold attracted some buyers for the second consecutive day, but the momentum lacked strength as it stayed confined to its familiar range from the past week. Geopolitical tensions and uncertainties surrounding global policies, including the aftermath of US President-elect Donald Trump’s tariff plans, continue to offer mild support to the haven asset.

However, expectations of a cautious Federal Reserve stance on future rate cuts, amid concerns over potential inflationary pressures, have capped the upside. Rising US Treasury bond yields, bolstered by such inflation concerns, provide further support for the US Dollar, keeping Gold's gains in check. Traders are now eyeing upcoming speeches from Federal Reserve Chair Jerome Powell and critical US data releases, including the ADP employment report and ISM Services PMI, for fresh insights.

Oil

Oil prices started the week on a positive note, driven by prepositioning for the OPEC+ meeting scheduled for Thursday. The market remains focused on potential production adjustments, with Iranian officials pointing fingers at OPEC+ for contributing to the recent dip in oil prices. Despite the allegations, traders appear optimistic about a possible resolution to stabilize the market.

The EIA inventory data, due later today, will also be a focal point for oil traders as it provides critical insights into supply dynamics ahead of the OPEC+ decision.

Key Data and Events to Watch

Today’s economic calendar is loaded with significant events:

• November PMI readings from Europe and the US, which will shape market expectations for growth trajectories.
• A critical address by Fed Chair Jerome Powell, expected to offer clues on the central bank's rate-cut path.
• US ADP employment figures and ISM Services PMI, both seen as key precursors to Friday’s Nonfarm Payrolls (NFP) report.
• EIA crude inventory data, which could provide short-term direction for oil markets ahead of the OPEC+ meeting.