A relatively dovish speech from Fed chair Powell, and the prospect of a pivot away from zero-COVID in China, put some fuel into the risk asset rally last week.
Last week the US dollar was once again one of the worst-performing currencies in the world, having suffered its worst monthly performance since September 2010 in November. It also fell against all but one of its G10 peers on the week. The greenback is now noticeably cheaper compared to its late-September highs. Traders are now short the dollar on net, and we could see some consolidation of current levels into year-end, but it will all depend on the relative hawkishness of the respective central banks at their upcoming December meetings.
This week will be a quiet one in terms of data releases and policy news, and markets will likely mark time as they wait for the big three central bank meetings that will take place in the span of less than 24 hours next week. The Federal Reserve will kick things off on the 14th, followed by the Bank of England and the ECB on the 15th.