The US dollar remains slightly firmer as the week and month draw to a close, following a subdued period of trading. Despite being month-end, market activity has been muted, likely influenced by the ongoing Thanksgiving holiday and Black Friday. A technical issue at a CME data centre overnight further dampened trading enthusiasm.
In the major currency pairs, the dollar has held its ground after a weaker week. EUR/USD has dipped 0.2% to 1.1570 but is maintaining a bounce off key near-term support levels. GBP/USD also dropped 0.2% to 1.3211, while USD/JPY edged down 0.1% to 156.15. Changes across the board are minor, with the run-up to the London fix later today being the primary event risk before the weekend.
USD/CAD remains flat at 1.4027. NZD/USD has shed some of its gains from earlier in the week, falling 0.4% to 0.5707. Among other markets, European equities have sustained their weekly gains and are relatively steady today. US markets will operate on a half-day schedule, anticipating quiet trading before the weekend.
In commodities, gold is gaining 0.4% to $1,174.74 per ounce, bolstered by ongoing interest in precious metals amid dovish expectations for the Federal Reserve. The metal is testing technical breakout levels ahead of December. WTI crude oil has risen 0.7% to $59.08 per barrel.
Cryptocurrency markets are steady, with Bitcoin slightly up 0.1% to $91,519. Risk appetite appears to have improved this week, as Bitcoin remains above the $90,000 level.
Recent economic data paint a nuanced picture for Europe. November inflation figures showed inflation expectations nudging higher in an ECB survey. Regionally, Bavarian CPI came in at 2.2% year-on-year, matching prior readings, while France’s preliminary November CPI rose 0.9% year-on-year, below the expected 1.0%. Italy’s preliminary CPI was 1.2% year-on-year, slightly below the anticipated 1.3%, and Spain’s preliminary CPI was marginally higher at 3.0% versus 2.9% expected.
Q3 GDP updates showed France holding steady with a final reading of 0.5% quarter-on-quarter growth, Italy modestly upgraded from preliminary figures to 0.1%, while Switzerland’s GDP contracted by 0.5%, deeper than the expected 0.4% decline.
Additional German data revealed unemployment rising by 1,000 in November, below the 5,000 figure anticipated. Retail sales were weaker than expected, falling 0.3% month-on-month compared to a forecast gain of 0.2%, while the import price index increased 0.2% against a flat expected reading.
On the geopolitical front, China has requested a formal explanation from Malaysia regarding its recent trade deal with the US, signalling potential shifts in trade dynamics.
For forex traders, this week’s developments reinforce the importance of tracking central bank expectations, as the Fed’s hinted dovish stance continues to support metals and temper dollar strength. Market participants should also be mindful of quiet trading conditions into the weekend and note that December’s US non-farm payrolls release has been postponed until 16 December, following the Fed meeting. This delay may reduce volatility at the start of December.
Original Source: Justin Low of investinglive.com
