📈 Middle East & Ukraine in the Background — Quiet, Tactical Trading Ahead of FOMC Minutes in NY
📈 Middle East & Ukraine in the Background — Quiet, Tactical Trading Ahead of FOMC Minutes in NY
■ Market Overview: Commodity Currencies Hold Up, But Overall Tone Remains Cautious
During Tokyo and Asian trading, FX markets were relatively calm.
The yen drifted slightly weaker, but the standout theme was:
Resilience in commodity currencies such as AUD and CAD.
Drivers included:
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President Trump’s warnings toward Iran
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Reports of Saudi airstrikes in Yemen
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Higher oil prices
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Hopes for additional Chinese economic support
Rather than a classic “risk-on” move, this was better viewed as price action linked to commodity strength.
Meanwhile, the dollar remains firm — but still confined within the broader post-November downtrend, keeping direction limited.
■ JPY: “Summary of Opinions” Impact Faded Quickly
The BoJ’s latest Summary of Opinions highlighted a more constructive stance toward additional rate hikes.
However, the Cabinet Office stressed:
the need to avoid excessive downward pressure on the economy.
That muted expectations for the next hike, and the reaction faded.
The result has simply been alternating:
gradual rises → gradual declines
without any sustained trend.
■ AUD & Precious Metals: Strong — But Overheating Signs Appear
Silver and copper have surged toward record territory, driven by:
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Supply concerns
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Geopolitical risk premium
This pushed AUD to fresh year-to-date highs.
But afterward, profit-taking hit gold and silver, pulling AUD back:
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AUD/USD: 0.6727 → ~0.6700
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AUD/JPY: 105.22 → mid-104s
This confirmed just how fragile and volatile the market has become.
■ Europe Session: Typical Year-End Quiet
London trading has been mostly data-light, with only:
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Turkish employment data
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Switzerland’s KOF leading indicator
— neither likely to shift sentiment.
Equities also reflected holiday mode:
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Germany closed
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UK and France on shortened trading hours
➡ A textbook “year-end quiet market.”
■ NY Session: The Real Focus Is the FOMC Minutes
U.S. releases include:
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Housing data
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Chicago PMI
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Brazilian labor statistics
But the true focal point is the FOMC Minutes, due:
4:00 AM JST (Dec 31)
At the last meeting, the Fed cut rates — yet:
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Some members favored leaving policy unchanged
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Debate continues over whether further cuts next year are justified
Markets will be parsing how the Committee balances:
employment concerns vs. inflation control.
Depending on where the emphasis lies, the dollar could move sharply.
■ Bottom Line: The Calm Before the Move
✔ Geopolitical risks linger, but do not point to one-way trades
✔ AUD remains strong but increasingly volatile
✔ JPY is trapped between rate expectations and intervention risk
✔ FOMC Minutes are the key catalyst
This is not a market to “force trades.”
The smarter play is to wait — and react calmly to the first moves once the news hits.
