Forex News Timeline

Friday, December 1, 2023

In Friday's session, the EUR/GBP pair was seen at 0.8560 after a downward rally of 0.70%.

EUR/GBP was seen at 0.856 with a downside movement of 0.70%, it lowest since early September.In the daily and 4-hour chart, indicators hit oversold conditions after a seven-day losing streak.The cross will also close a 1.40% weekly loss.
In Friday's session, the EUR/GBP pair was seen at 0.8560 after a downward rally of 0.70%. On the daily and four-hour chart, the cross reached oversold conditions suggesting that an upwards correction may be on the horizon, but the overall trend currently favours the sellers. The technical indicators on the daily chart are exhibiting robust bearish momentum. The pair's position beneath the 20, 100 and 200-day Simple Moving Averages (SMAs) underscores the dominant downward trend. In addition, the rising red bars of the Moving Average Convergence Divergence (MACD) concur with this downward outlook, reinforcing the influence of bearish pressure while the Relative Strength Index (RSI) is navigated into oversold territory, a sign typically associated with selling saturation which tends to be followed by an upwards correction.  Examining the four-hour chart on the shorter time frame presents similar bearish signals. The pair shows signs of oversold conditions, as evidenced by the Relative Strength Index (RSI). while the Moving Average Convergence Divergence (MACD) prints rising red bars. Support Levels: 0.8530, 0.8515, 0.8500.
Resistance Levels: 0.8600, 0.8630, 0.8670.
EUR/GBP daily chart    

The EUR/CHF is down eight-tenths of a percent heading into the Friday closing bell as the Euro (EUR) declines for a third consecutive trading day against the Swiss Franc (CHF).

The EUR/CHF is down in a three-day bear binge.Euro chart action is decidedly one-sided as the EUR falls back across the board on the week.Next week sees Eurozone PPI, GDP growth.The EUR/CHF is down eight-tenths of a percent heading into the Friday closing bell as the Euro (EUR) declines for a third consecutive trading day against the Swiss Franc (CHF). The EUR/CHF is down 2% on the week, tumbling into 0.9450. The Euro is seeing accelerating losses as markets lose faith in the Eurozone’s economy, with inflation slumping faster than markets were anticipating and a firmly-dovish European Central Bank (ECB) already looking at the possibility of bringing quantitative easing back into the fold. ECB's President Lagarde: Central bank to discuss QT in the “not too distant future” ECB President Christine Lagarde hit newswires this week admitting that the ECB is likely to begin discussing easing programs soon, and the hat-tip to loosening monetary policy has sent the Euro skidding. The EUR is down for the week against every other major currency, sending the EUR/CHF down in one-sided trading from Monday’s early high of 0.9662. European inflation missed the mark on market expectations, with Eurozone Harmonized Index of Consumer Prices (HICP) printing at -0.5% in the MoM figure, with the Core HICP YoY headliner coming in at 3.6% against the forecast 3.9%, declining even further from the previous period’s 4.2% print. Swiss Gross Domestic Product (GDP) came in mixed on Friday morning, with the QoQ beating market expectations to print at 0.3% compared to the median market forecast of 0.1%, while the previous quarter’s 0.0% saw a downside revision to -0.1%. Annualized Swiss GDP also saw a miss on the calendar, coming in at 0.3% compared to the market’s expected 0.5%, and the previous period also saw a downside revision from 0.5% to 0.3%. Next week leans notably heavy into the Euro side, with another appearance from ECB President Lagarde on Monday, followed by Eurozone Producer Price Index (PPI) figures on Tuesday. European investors will also be keeping an eye out for the Eurozone GDP print, slated for Thursday and forecast to show a -0.1% print for the third quarter. EUR/CHF Technical Outlook The EUR/CHF’s chart action this week has been notably one-sided, tumbling back into October’s lows near 0.9450 in only three days, falling from a near-term swing high at 0.9680. Long-term momentum in the EUR/CHF continues to be capped off by a bearish 200-day Simple Moving Average (SMA) declining into the 0.9700 handle. The EUR/CHF is down nearly 2.5% from November’s peak bids at 0.9685. EUR/CHF Daily Chart EUR/CHF Technical Levels  

The EUR/JPY closed the week with a negative tone, down by 1% on Friday, for a total of more than 2.20% weekly losses, and shifts bearish after breaking key support levels on Friday.

EUR/JPY records significant weekly losses, closing down by more than 2.20%.A key focus for traders is the Ichimoku Cloud support around the 158.00 level, which could accelerate the downtrend toward 154.00.For a shift back to bullish resumption, EUR/JPY must reclaim the Kijun-Sen at 161.00 and surpass the recent cycle low at 161.24, with the Tenkan-Sen at 161.68 up next.The EUR/JPY closed the week with a negative tone, down by 1% on Friday, for a total of more than 2.20% weekly losses, and shifts bearish after breaking key support levels on Friday. At the time of writing, the EUR/JPY exchanges hands at 159.73, following a fall of more than 160 pips from a daily high of 161.77. The pair shifted bearish, though it’s pending breaching support at the Ichimoku Cloud (Kumo), at around the 158.00 area. Once the EUR/JPY extends its losses below that price level, sellers will target the October 3 swing low of 154.34, ahead of the July 28 low of 151.40 On the other hand, EUR/JPY needs to reclaim the Kijun-Sen at 161.00 before challenging the most recent cycle low at 161.24, the November 21 low. If those levels are surrendered, the next stop would e the Tenkan-sen at 161.68. EUR/JPY Price Analysis – Daily Chart EUR/JPY Technical Levels  

United States CFTC Oil NC Net Positions declined to 183.2K from previous 207.3K

United States CFTC Gold NC Net Positions climbed from previous $171.7K to $200.1K

United States CFTC S&P 500 NC Net Positions climbed from previous $-80.1K to $-65K

Australia CFTC AUD NC Net Positions: $-71.2K vs $-78K

Japan CFTC JPY NC Net Positions down to ¥-109.2K from previous ¥-105.5K

Eurozone CFTC EUR NC Net Positions down to €-143.2K from previous €129.7K

United Kingdom CFTC GBP NC Net Positions rose from previous £-26.1K to £-7.9K

GBP/JPY trades with a negative tone late during the North American session after hitting a daily high of 187.52.

GBP/JPY experiences a decline of 0.24% as Friday’s session ends.Key support levels for GBP/JPY include 185.63 (Senkou Span A) and the 185.00 psychological mark, with further support at 184.71 (Kijun-Sen).On the upside, resistance is seen at 187.00, with a break above potentially targeting 188.00 and the November 24 high at 188.66.GBP/JPY trades with a negative tone late during the North American session after hitting a daily high of 187.52. Nevertheless, overall, the Japanese Yen (JPY) strength weighed on the Pound Sterling (GBP), despite the Bank of England’s (BoE) Governors' effort to emphasize they would keep rates higher for longer. At the time of writing, the cross is trading at 186.56, down 0.24%. The GBP/JPY erased last Thursday’s gains on Friday, as bears extended the downtrend to four days, extending its weekly losses to 0.96%. Nevertheless, they failed to push prices below the 186.00 figure, which could have opened the door to challenge the 186.00 figure, followed by key support levels. In that event, the GBP/JPY next support would be the Senkou Span A at 185.63, followed by the 185.00 figure. Further downside is seen at the Kijun-Sen at 184.71. On the other hand, if GBP/JPY exchange rate stays above the 186.00 mark, that would keep bulls hopeful of higher prices, with the first resistance seen at the 187.00 figure. A decisive break would expose the 188.00 figure, followed by the November 24 high at 188.66. GBP/JPY Price Analysis – Daily Chart GBP/JPY Technical Levels  

During Friday’s session, the EUR/USD cleared many of its daily losses, recovering to 1.0885 after finding support at a low of around 1.0830.

The EUR/USD trimmed losses after falling to a low of 1.0830 and then recovered towards 1.0885.Jerome Powell acknowledged the need for evidence to declare a victory on inflation.US ISM PMI from November came in lower than expected.During Friday’s session, the EUR/USD  cleared many of its daily losses, recovering to 1.0885 after finding support at a low of around 1.0830. The recovery was triggered by a broad US dollar weakness, which, despite Powell’s hawkish words during his speech at Spelman College, struggles to make a move higher. In addition, the shared currency will close a 0.60% losing week after gaining more than 2% since mid-November. In line with that, Chairman Powell acknowledged a decrease in inflation while noting that core inflation remains elevated. He emphasised the need for more evidence regarding progress in achieving the 2% inflation target. Furthermore, he mentioned that interest rates are acting restrictively but cautioned against prematurely declaring that monetary policy has reached a sufficiently restrictive stance. He then claimed that decisions on such matters would still be based on the incoming data. On the data front, the Institute for Supply Management (ISM) Manufacturing PMI from November printed 46.7, matching its previous figure while falling short of the anticipated 47.6. Next week, the US will release its monthly Nonfarm Payrolls report which investors will closely watch.
EUR/USD levels to watch Based on the technical indicators on the daily chart, there is a significant push of bullish momentum, but with buyers taking a break. This is indicated by the Relative Strength Index (RSI), which shows a flat position in positive territory, while the Moving Average Convergence Divergence (MACD) presents a  red bar, which signals sellers are gradually are gaining strength.  On the other hand, the pair's position above the 20, 100, and 200-day Simple Moving Averages (SMAs) clearly confirms that bulls are firmly in control of the overall trend.  Support Levels: 1.0850 (20-day SMA), 1.0830, and 1.0815.
Resistance Levels: 1.0900,1.0950, 1.0970.
EUR/USD daily chart    

The NZD/USD is continuing its climb as the Kiwi (NZD) stands out as the single best-performing currency of the major currencies bloc, up 2% against the US Dollar (USD) for the trading week.

The NZD/USD gains three-quarters of a percent on Friday to etch in a seventh straight gain.The Kiwi is up 2% against the US Dollar heading into the tail end of Friday's trading session.Thin Kiwi data next week gives way to another bout of US NFP data next Friday.The NZD/USD is continuing its climb as the Kiwi (NZD) stands out as the single best-performing currency of the major currencies bloc, up 2% against the US Dollar (USD) for the trading week. An improving economic outlook coupled with a hawkish Reserve Bank of New Zealand (RBNZ) is bolstering the NZD across the board. The Kiwi is climbing into the 0.6200 handle against the Greenback for the second time in three days. The RBNZ held interest rates at 5.5% this week, but a hawkish stance from New Zealand’s central bank is propping up the Kiwi, with RBNZ officials actively weighing additional rate hikes with inflation continuing to fall outside of the RBNZ’s target 1-3% band for so long. Consumer sentiment and business outlook surveys continue to rise, with the New Zealand ANZ Roy Morgan Consumer Confidence survey index rising to a yearly high of 91.9 early Friday, adding further momentum to the NZD/USD heading into the week’s end. Next week has a fairly thin showing for the Kiwi on the economic data calendar, but eyes will be turning towards next Friday’s US Non-Farm Payrolls release, where the US is expected to see a marginal gain in the number of new job hires from 150K to 170K in November. NZD/USD Technical Outlook The NZD/USD is set to close in the green for twelve of the last fourteen consecutive trading days, and as long as the pair holds near the 0.6200 handle into the Friday closing bell that will etch in seven straight days of gains. The Kiwi-Dollar pairing has climbed 7.5% from October’s bottom bids of 0.5772, and a continuation of recent bullish momentum will see a new long-term trend form up and take a challenge run at July’s swing high into 0.6400. The NZD/USD easily slipped through the 200-day Simple Moving Average (SMA) last week as the Kiwi’s near-term trend rotates firmly bullish, and bulls will be fresh and ready for a leg higher as long as a retracement doesn’t take the pair back below the 200-day SMA at the 0.6100 handle. NZD/USD Daily Chart NZD/USD Technical Levels  

GBP/USD climbed more than 90 pips late during Friday’s North American session, or 0.70%, after reaching a daily low of 1.2609.

GBP/USD experiences a significant uptick, climbing 0.70% above the 1.2700 mark.Federal Reserve Chairman Jerome Powell's comments on restrictive monetary policy and high core inflation fail to bolster the US Dollar.Market futures now anticipate over 130 basis points of rate cuts by the Fed in 2023, leading to a drop in US Treasury bond yields.GBP/USD climbed more than 90 pips late during Friday’s North American session, or 0.70%, after reaching a daily low of 1.2609. Speculations that the Federal Reserve has finished its tightening cycle sparked more than 100 basis points of cuts by the Fed next year, a headwind for the Greenback. The pair is trading at 1.2711. British Pound gains against the US Dollar, driven by market expectations of Federal Reserve rate cuts and dovish signals The main reason behind the GBP/USD’s advance is a softer greenback. Even though the US Federal Reserve’s Chairman Jerome Powell pushed back against rate cut expectations, he wasn’t unable to move the needle and boost the US Dollar, which measured by the US Dollar Index, which measures the currency against six other peers, dropped 0.38%, at 103.12. Powell said the monetary policy is “well into restrictive territory,” seen as a green light for investors, who seeing risk, turned to high beta currencies like the British Pound (GBP). At the same time, Wall Street paired its losses and soared late in the session. Even though he acknowledged that inflation is easing, he said that core prices remain “too high.” Money market futures see the Federal Fund Rates (FFR) at around 4.11% by the end of next year, implying more than 130 basis points of rate cuts. Consequently, US Treasury bond yields plunged, with 2s and 10s slashing more than ten basis points each, at 4.56% and 4.22%, respectively. On the data front, manufacturing business activity in the US took a toll for thirteen straight months, remaining in recessionary territory at 46.7, unchanged compared to October but below forecasts of a 47.6 improvement. Across the Atlantic, the S&P Global Manufacturing PMI improved, though it remained in recessionary territory. In contrast, Bank of England’s (BoE) officials remained hawkish. Margaret Greene said that she sees signs of inflation persistence, as she said a “core” services inflation, excluding energy prices, sits at 6%, which could refrain the BoE from discussing rate cuts. GBP/USD Price Analysis: Technical outlook On Friday, the GBP/USD rise above the 1.2700 figure formed a bullish engulfing candle pattern, implying that bulls are in charge. Yet, to cement their case, they must breach the August 30 high of 1.2746 to threaten to challenge the 1.2800 figure. In that case, the pair would’ve broken two resistance levels, which could pave the way toward 1.3000. On the other hand, if the major stalls and achieves a daily close below 1.2700, that could keep the pair in consolidation within the 1.2600/1.2740ish range.  

West Texas Intermediate (WTI) Crude Oil is seeing a choppy session during Friday’s late-week trading, climbing back towards $77.00 per barrel before falling once more towards $74.50 as oil markets whip.

Crude Oil rises, then tumbles again in frothy energy markets.WTI backslides into $74.50 in exacerbated market volatility.OPEC production cuts unlikely to eat away at oversupply amidst declining demand.West Texas Intermediate (WTI) Crude Oil is seeing a choppy session during Friday’s late-week trading, climbing back towards $77.00 per barrel before falling once more towards $74.50 as oil markets whip. Crude Oil saw a sharp rejection on Thursday as investors remain skeptical the Organization of the Petroleum Exporting Countries (OPEC) will be able to successfully execute recently-announced production cuts. OPEC recently announced an additional million barrels per day (bpd) reduction in Crude Oil pumping quotas, but markets remain skeptical about the oil cartel’s ability to execute a production cap that is increasingly unpopular with many of its smaller constituent member states. Lack of agreement over amounts, length of time, and general terms sees fossil fuel investors raising eyebrows as OPEC leaves itself no real method of enforcing compliance with the opt-in cuts, which are expected to run through the first quarter of 2024. With OPEC’s meager million bpd production cut unlikely to chew through slumping global Crude Oil demand, oil barrel supply overhangs are expected to exacerbate in the coming months. According to the US Energy Information Administration (EIA), US Crude Oil reserves climbed even further for the week into November 24th, adding 1.6 million barrels to current Crude Oil stocks. The number represents a notable decline from the previous week’s 8.7 million barrel addition, but it still overshot the market’s hopeful forecast of a 933K barrel drawdown. WTI Technical Outlook WTI Crude Oil is heading back into the low end on Friday after a cautious recovery gets cut short. US Crude Oil saw a sharp rejection from the 200-day Simple Moving Average (SMA) near $78.00 this week, and WTI is set to head into the Friday market close on the back foot. Crude Oil has seen a rough, volatile, and lopsided consolidation phase lately, cycling in rough trade between $78.00 and $75.00 per barrel. A bearish extension from here will require significant momentum to crack the downside barrier near $74.00, while a topside swing will need to land somewhere closer to the 50-day SMA near the $82.00 handle. WTI Daily Chart WTI Technical Levels  

United States Baker Hughes US Oil Rig Count rose from previous 500 to 505

United States Baker Hughes US Oil Rig Count: 500

The US Dollar (USD) Index has shown a modest decline, trading at 103.25, despite Federal Reserve Chair Jerome Powell's hawkish stance.

The DXY Index is seen with mild losses around 103.25, after reaching a high of 103.70, above the 200-day SMA.Fed Chair Powell warned that the bank will hike again if needed, keeping its data-dependency approach.The US ISM Manufacturing PMI declined in November, as expected.The US Dollar (USD) Index has shown a modest decline, trading at 103.25, despite Federal Reserve Chair Jerome Powell's hawkish stance. The November ISM Manufacturing PMI came in lower than expected but didn’t trigger any significant downward movements in the Greenback. What seems to weaken the currency is that markets aren’t buying Powell’s hawkishness. In line with that, despite cooling inflation and a mixed trend in the United States labour market, the Fed turned surprisingly less dovish, maintaining an open stance toward further policy tightening. While important gauges of inflation like the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) have trended lower, the bank has declared that it needs to see more evidence of inflation cooling down, leaving the door open for further tightening if needed.
Daily Market Movers: US Dollar with mild losses despite Powell warning markets  Chair Powell noted that in a speech at Spelman College on Friday that it is “premature” to say monetary policy is restrictive enough and that the bank will raise rates again if needed to lower inflation. On the data front, the ISM Manufacturing PMI reported by the Institute for Supply Management marked 46.7 for November, on par with the previous figure while falling short of the anticipated 47.6. Looking ahead, a few key events are scheduled with implications for the US Dollar and expectations on the Fed next week, including Retail Sales data for November on Thursday, followed by the November Nonfarm Payrolls report on Friday. US bond yields are experiencing a downward trend with the 2-year, 5-year and 10-year yields standing at 4.57%, 4.16%, and 4.25%, respectively, and seem to limit the upside for the USD. According to the CME FedWatch Tool, market expectations for the December meeting indicate investors do not expect a rate hike. Additionally, swap markets are pricing in rate cuts midway through 2024. Technical Analysis: US Dollar selling momentum persists, DXY capped by the 200-day SMA The indicators on the daily chart paint a bearish picture of the US dollar. The Relative Strength Index (RSI) position underscores strong selling momentum, while the negative skew in the Moving Average Convergence Divergence (MACD) histogram further validates this downward pressure.  Bolstering the bearish case, the DXY position in relation to the Simple Moving Averages (SMAs) reinforces the downward trajectory. With the DXY remaining below the 20, 100 and 200-day SMAs, it's apparent that buyers are facing an uphill battle against a prevailing bearish trend. 
Support levels: 103.15, 103.00, 102.90.
Resistance levels: 103.60 (200-day SMA), 104.00, 104.20 (100-day SMA)       US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

United States Baker Hughes US Oil Rig Count rose from previous 500 to 505

Silver price rises during Friday’s North American session, reached a six-month high at around $25.46 before dipping to its current spot price.

Silver is threatening to test YTD highs after reaching a multi-month high.For that outcome, XAG/USD needs to rally above the $26.00 figure.XAG/USD could turn bearish if it drops below the $25.00 mark.Silver price rises during Friday’s North American session, reached a six-month high at around $25.46 before dipping to its current spot price. At the time of writing, the XAG/USD is trading at $25.38 after bouncing from a daily low of $25.09, gaining 0.54%. XAG/USD remains bullish and set to challenge the May 10 daily high at $25.91, ahead of the $26.00 figure. A breach of the latter will expose the year-to-date (YTD) high of $26.12. For the XAG/USD to flip bearish, it would need to drop below the November 30 high of $25.28. Once done the next support would be the November 29 daily low of $24.85, followed by the November 28 low of $.24.54. Further downside is seen at the November 17 swing high turned support at $24.14. XAG/USD Price Analysis – Daily Chart XAG/USD Technical Levels  

Federal Reserve Chair Jerome Powell said on Friday that the central bank is getting what they wanted to get and they don’t have to be in a rush at the moment.

Federal Reserve Chair Jerome Powell said on Friday that the central bank is getting what they wanted to get and they don’t have to be in a rush at the moment. He noted that inflation is still well above target but moving in the right direction.  At a Fireside Chat at Spelman College in Atlanta, Powell explained that it is the data that will tell if the Fed has done enough or needs to do more. He argued they are on a path to get inflation down to the 2% target without large job loss.  Chair Powell added that consumer spending has been surprisingly strong. Regarding fiscal policy he mentioned that is unsustainable in the long run.  Key takeaways from opening remarks:  By many measures, conditions in the labor market are very strong (…) Today, labor market conditions remain very strong, and the economy is returning to a better balance between the demand for and supply of workers.  The pace at which the economy is creating new jobs remains strong, and has been slowing toward a more sustainable level. That gradual slowing has come in part due to the efforts of the Fed to slow the growth of the economy to help reduce inflation. Partly because of that labor force growth, the unemployment rate has edged up over the second half of the year, though it remains historically low at 3.9 percent.  The FOMC is strongly committed to bringing inflation down to 2 percent over time, and to keeping policy restrictive until we are confident that inflation is on a path to that objective. It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so. Market reaction During Powell's presentation, the US Dollar Index (DXY) accelerated to the downside, falling below 103.30. At 19:00 GMT, Powell will participate in a roundtable with Fed’s Governor Lisa Cook, speaking with technology innovators and entrepreneurs at Spelman College. 
 

The Euro (EUR) has accelerated declines against the Pound Sterling (GBP) in Friday trading, tumbling out of a near-term descending channel.

The EUR/GBP is extending into a seventh-straight day of losses as the Euro waffles.Eurozone data continues to build support for a dovish-leaning ECB.ECB President Lagarde to speak again on Monday.The Euro (EUR) has accelerated declines against the Pound Sterling (GBP) in Friday trading, tumbling out of a near-term descending channel. The EUR/GBP tested 0.8580 during the US Friday market session with the Euro down nearly six-tenths of a percent against the Pound Sterling on the day. The EUR is staring down the barrel of seven straight down days against the GBP, and the EUR/GBP has shed over 2% from mid-November’s peak bids near 0.8765. The Euro is on pace to see its worst consecutive-day performance in 2023, with the EUR/GBP set to close in the red for all but one of the last ten consecutive trading days. The GBP is no stranger to flopping economic data, but this week’s dovish European Central Bank (ECB) showings is highlighting the Eurozone’s wobbling data releases on the economic calendar. Eurozone inflation slipped faster than expected this week after the European Core Harmonized Index of Consumer Prices (HICP) printed below-forecast on Thursday, with the YoY figure for the annualized period into November slipping to 3.6% against the forecast 3.9%, extending a decline from October’s YoY print of 4.2%. ECB's President Lagarde: Central bank to discuss QT in the “not too distant future” ECB President Christine Lagarde made an appearance earlier in the week highlighting just how dovish the ECB has rotated in recent weeks, expressing the sentiment that quantitative easing could soon be back on the table for the Euro. Next week will kick things off with yet another appearance from ECB President Lagarde on Monday, who will be speaking specifically about monetary policy at the Academy of Moral and Political Sciences, in Paris. The UK follows up on Tuesday with BRC Like-For-Like Retail Sales for the year into November, forecast to tick down slightly from 2.6% to 2.5%. After that will be Eurozone Producer Price Index (PPI) figures, and the MoM number in October is expected to confirm a decline from September’s 0.5% to a nearly-flat 0.2%. EUR/GBP Technical Levels The EUR/GBP's bearish acceleration on Friday sends the pair tumbling out of a near-term descending channel from last week's high bids near 0.8760, and the pair easily slipped below the 0.8600 handle in Friday trading. Intraday action has been steadily capped by the 50-hour Simple Moving Average (SMA) through most of the week's trading, and a seven-straight-day decline on the daily candlesticks sees the EUR/GBP falling away from the 200-day SMA at 0.8680. The 50-day SMA barely had a chance to confirm a bullish crossover of the 200-day SMA before rotating back into a bearish stance, and the shorter-term moving average will be capping off any technical recoveries from ten-week lows. EUR/GBP Hourly Chart EUR/GBP Daily Chart EUR/GBP Technical Levels  

Gold price extended to a new seven-month high in the mid-North American session after the US Federal Reserve Chair Jerome Powell welcomed recently revealed soft inflation data, though stressed core inflation “is still too high.” At the time of writing, the XAU/USD is trading at around $2059, gaining more than 1.10%.

Gold price rallied to a new multi-month high of $2060.62 amid Powell’s speech.Federal Reserve Chair Jerome Powell's remarks on soft inflation data and high core inflation boost Gold's appeal as a hedge.US interest rate expectations now include nearly 135 basis points of Fed rate cuts by the end of 2024, as indicated by money market futures.Gold price extended to a new seven-month high in the mid-North American session after the US Federal Reserve Chair Jerome Powell welcomed recently revealed soft inflation data, though stressed core inflation “is still too high.” At the time of writing, the XAU/USD is trading at around $2059, gaining more than 1.10%. XAU/USD extended its gains despite Powell’s neutral stance During a Q and A session, Fed Chair Powell said, “Wed (Fed) are getting what we wanted to get,” giving a green light on bullion traders, which took advantage of XAU/USD’s dip to the $2044.50 area, before jumping to new day and multi-month highs. Meanwhile, US Treasury bond yields are plunging, with the 10-year benchmark note coupon dropping six and a half basis points, at 4.263%, after reaching a high of 4.349%, a tailwind for Gold prices. Consequently, the Greenback tumbles, as revealed by the US Dollar Index, which measures the currency against six peers, down 0.24%, at 103.26. In the meantime, money market futures show investors are expecting close to 135 basis points of Fed rate cuts for the end of 2024. Earlier, the Institute for Supply Management (ISM) revealed the Manufacturing PMI for November, which showed that business activity remains in contraction for the thirteenth straight month. Prices paid by manufacturers rose while the employment index eased, in alignment with the recent unemployment claims data. XAU/USD Price Analysis: Technical outlook Gold’s is rallying sharply, with buyers eyeing all time high of $2081.82. It should be point out, there’s no additional resistance levels on its way, besides the $2060 and $2070 areas. Once those psychological levels are taken out, the ATH would be at reach. On the flip side, the first support is seen at the November 29 daily high at $2052.13, before opening the door slip to November’s 30 daily low at $2031.58.  

The USD/JPY trims some of its Thursday gains on Friday, diving below the Ichimoku Cloud (Kumo) early in the North American session.

USD/JPY experiences a 0.52% decline in the North American session.A lower-than-expected ISM manufacturing reading for November weighed on the US Dollar.Fed Chair Jerome Powell acknowledges some easing in inflation but emphasizes that core inflation remains high and monetary policy decisions will be data dependent.The USD/JPY trims some of its Thursday gains on Friday, diving below the Ichimoku Cloud (Kumo) early in the North American session. At the time of writing, the pair is exchanging hands at 147.35, registering losses of 0.58%. USD/JPY drops due to a subdued ISM Manufacturing PMI, despite Powell’s neutral stance The sudden US Dollar weakness was triggered by a softer Institute for Supply Management (ISM) reading for November, which showed that business activity remained subdued at 46.7, unchanged from the October reading, and the 13th straight month standing below 50, the expansion/contraction threshold, which indicates the manufacturing sector is underperforming. Estimates for the ISM were at 47.6, while some subcomponents of the index like Employment showed the labor market is easing. Regarding inflationary pressures, the prices subcomponent jumped from 45.1 to 49.9, which could prevent Federal Reserve’s (Fed) officials from reducing monetary policy. In the meantime, Fed Chairman Jerome Powell is crossing the newswires. In prepared remarks, he acknowledged that inflation has eased, but core inflation is too high. He added that he needs to see more progress on lowering inflation to its 2% target. He said that rates are restrictive but it’s “premature” to say that monetary policy is restrictive enough. Chair Powell said decisions would be made meeting by meeting decisions. On the Japanese front, the Jibun Bank Manufacturing PMI was 48.3 at contractionary territory, above estimates but below October’s 48.7. in the meantime, the Japanese labor market remains tight as the unemployment rate fell to 2.5% in October, data showed on Friday. USD/JPY Price Analysis: Technical outlook The downtrend remains in place, but the USD/JPY break below the Kumo could accelerate prices to fall toward the 146.00 figure. A daily close below 147.60, the bottom of the cloud, could open the door to test 147.00. A breach of the latter would expose the September 11 daily low of 145.89, before prices slump to September’s 1 swing low at 144.43. On the other hand, if buyers keep exchange rates inside the Kumo, that could pave the way for consolidation.  

Most recent article: Canadian Dollar gains across the board on Thursday despite mixed Canadian GDP growth Canadian Dollar sees further gains heading into the end of the trading week.

Most recent article: Canadian Dollar gains across the board on Thursday despite mixed Canadian GDP growthCanadian Dollar sees further gains heading into the end of the trading week.Canada's new job hiring outpaced market expectations, but the unemployment rate ticked slightly higher.Canadian wage growth holds steady at 5%.The Canadian Dollar (CAD) is testing higher ground in Friday trading, climbing once more against its largest peer, the US Dollar (USD), after Canadian employment figures handily trounced market expectations. The Canadian Dollar is one of the top-performing currencies for the week, having gained a full percent against the US Dollar from Monday’s opening bids. Canada added almost twice as many jobs as the median market forecast expected in November, showing almost 25K new hires against the forecast of 15K, increasing the pace of new job additions from October’s 17.5K.  The Canadian Unemployment Rate ticked slightly higher to 5.8%, in line with investor expectations, and Average Hourly Wages for the year into November held steady with October’s print of 5%, helping to ease demand-driven inflation concerns as Canadian wage growth remains capped under 6%. Daily Digest Market Movers: Canadian Dollar is on the move against the US Dollar once more, challenging 1.3500 The Canadian Dollar is up three-tenths of a percent against the US Dollar on Friday. Canada added 24.9K jobs in November compared to the previous 17.5K, beating expectations of a 15K print. Despite beating market forecasts, Canadian hiring remains below 2023’s peak print of 150K in February. CAD supremacy is limited by a slight decline in the Canadian S&P Global Manufacturing Purchasing Managers Index (PMI), which slipped from 48.6 to 47.7. The Canadian Unemployment Rate slightly increased from 5.7% to 5.8%, but markets broadly anticipated this figure. The CAD is still shrugging off Thursday’s Gross Domestic Product (GDP) backslide after quarterly GDP unexpectedly declined 1.1% for the third quarter. Investors are instead focused on the extreme upside revision of 2Q’s GDP growth from -0.2% to 1.4%. Crude Oil markets are as volatile as ever but continue to range as fossil fuel investor sentiment plays tug-of-war between declining global demand concerns and a fresh batch of Organization of the Petroleum Exporting Countries (OPEC) Crude Oil production cuts set to continue through Q1 2024. Canadian Dollar price today The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Euro.  USDEURGBPCADAUDJPYNZDCHFUSD  0.29% -0.25% -0.36% -0.74% -0.51% -0.56% -0.42%EUR-0.29%   -0.55% -0.66% -1.05% -0.80% -0.87% -0.71%GBP0.23% 0.52%   -0.13% -0.51% -0.28% -0.33% -0.18%CAD0.36% 0.66% 0.11%   -0.38% -0.16% -0.20% -0.04%AUD0.74% 1.03% 0.49% 0.39%   0.23% 0.18% 0.34%JPY0.49% 0.81% 0.22% 0.13% -0.23%   -0.05% 0.09%NZD0.56% 0.86% 0.31% 0.18% -0.17% 0.08%   0.20%CHF0.40% 0.70% 0.17% 0.05% -0.33% -0.10% -0.14%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Technical Analysis: Canadian Dollar tests 1.3500 against the US Dollar after sliding into the 200-day SMA The Canadian Dollar (CAD) continued its climb against the US Dollar (USD) on Friday, sending the USD/CAD down to the 1.3500 handle in Friday trading, and the pair is currently snarled along the 200-day Simple Moving Average (SMA) near 1.3520. The Canadian Dollar has climbed against the US Dollar for four of the last five consecutive trading days, and the USD/CAD is on pace to close out Friday action with one more down day as the pair trades into eight-week lows. With the USD/CAD down nearly 3% from November’s early peak at the 1.3900 handle, technical indicators have accelerated firmly into oversold territory. The 14-day Relative Strength Index (RSI) is testing the lower, oversold bound, and the Moving Average Convergence-Divergence (MACD) signal line has rotated into negative territory. USD/CAD Hourly Chart USD/CAD Daily Chart Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

In Friday's trading session, the Australian Dollar (AUD) found demand against its US counterpart, with the AUD/USD pair making gains and trading at around 0.6650.

The AUD/USD tallied modest gains, seeing action around the 0.6650 level.The US reported mixed ISM PMIs. China's PMIs were better than expected and tractioned the Aussie.Investors will look for clues in Jerome Powell’s speech at Spelman College in Georgia.In Friday's trading session, the Australian Dollar (AUD) found demand against its US counterpart, with the AUD/USD pair making gains and trading at around 0.6650. The pair's upward movement seems to be the positive PMI figures from China, which improved in November. As the Chinese economy plays a big role in the Australian economy, positive figures tend to benefit the Aussie. On the US side, for the 12th consecutive month, the US manufacturing sector experienced a contraction in economic activity in November. The ISM Manufacturing PMI remained unchanged at 46.7, lower than the market's expectation of 47.6. Focus now turns to Jerome Powell’s speech at 16 GMT and 19 GMT at two separate events organised by Spelman College in Georgia. In that sense, inventors will look for clues regarding the Federal Reserve (Fed) analysis of the recent data released by the US, which saw the US Consumer Price and Personal Consumption Expenditures Indexes, two important gauges of inflation for the bank decelerating in November.
AUD/USD levels to watch On the AUD/USD daily chart, it is evident that the buying momentum is dominating. The Relative Strength Index (RSI) is nearing overbought territory, while the histogram of the Moving Average Convergence Divergence (MACD) showcases rising green bars, reaffirming this buying trend.  Moreover, the AUD/USD is hovering above its 20, 100, and 200-day Simple Moving Averages (SMAs). This position is suggestive of sustained bullish momentum, as the pair is trading above these crucial markers, solidifying the control of the bulls on the broader scale.   Support Levels: 0.6600, 0.6580 (200-day SMA), 0.6500.
Resistance Levels: 0.6670, 0.6700, 0.6730.
AUD/USD daily chart    

Despite the Federal Reserve continuing to deliver a restrictive policy stance in 2023, Gold posted a very respectable performance, which saw prices hit $2,000 several times.

Despite the Federal Reserve continuing to deliver a restrictive policy stance in 2023, Gold posted a very respectable performance, which saw prices hit $2,000 several times. Strategists at TD Securities analyze the yellow metal’s outlook. Gold could well be range-bound for a quarter or so With inflation still considerably above the Fed's two percent target, the US central bank is unlikely to signal an imminent easing. As such, the yellow metal could well be range-bound, without a sustained breakout toward our $2,100 target occurring for a quarter or so. We believe that the combination of an expected Fed dovish pivot by Gold traders in the months to come and very strong official sector buying should lift prices to $2,100+ on a sustained basis in 2024.  

Strategists at Commerzbank analyze the long-term outlook for German power prices.

Strategists at Commerzbank analyze the long-term outlook for German power prices. Electricity prices even threaten to rise in the coming years Despite the recent fall in electricity prices, they remain high by both historical and international standards. Given the high costs of the energy transition, prices even threaten to rise in the coming years.  After the end of the transformation, however, the very low (variable) costs of generating ‘green electricity’ give reason to hope that costs will fall, even if higher system costs, such as for reserve capacities, will probably offset a considerable part of this advantage.  Electricity prices are likely to fall again, but remain a competitive disadvantage for the German economy.  

FOMC to cut in 2024, with an easing cycle of 200 bps, economists at ANZ Bank report.

FOMC to cut in 2024, with an easing cycle of 200 bps, economists at ANZ Bank report. Positive real rates through the cycle Restrictive monetary policy and improving supply fundamentals are contributing to a broad-based easing in consumer price inflation and moderation in wage growth. Even though we do not expect the Fed to raise the FFR target further, the real policy rate is expected to continue to rise as inflation moderates. Additional tightening in real terms will continue to put downward pressure on inflation well into 2024. We expect by mid-2024 the Fed will be confident inflation is on a sustainable path to its 2% target and that the Fed will commence cutting in Q3. We expect rates will fall 200 bps from peak to trough, with a terminal FFR ceiling rate of 3.50%, implying positive real rates through the cycle.  

Oil price witnessed an average 10% drop during November. Economists at ABN Amro analyze Oil’s market outlook.

Oil price witnessed an average 10% drop during November. Economists at ABN Amro analyze Oil’s market outlook. Brent to reach $95 by end-2024 For the first quarter of 2024, we expect that the voluntary cuts will have limited impact on prices, and be offset by a higher supply by non-OPEC producers such as the US and Guyana, associated with a lower global demand growth. This will induce a surge of a supply surplus, putting downward pressure on prices. Our outlook for the first quarter for Brent is to average around $83, while we expect an end of year price of $95, driven mainly by a recovery in the global economy as inflation softens and interest rates go down.  

Mexican Peso (MXN) stages a comeback against the US Dollar (USD) as the last month of the year begins, even though the Greenback posts solid gains against a basket of six currencies, namely the US Dollar Index (DXY).

Mexican Peso finished November with gains of more than 3.60% and began December in a positive tone.Mexico and US interest rate differential favors the Peso, as Fed officials have shifted dovish.USD/MXN traders are eyeing several US Federal Reserve Chair Jerome Powell speeches.Mexican Peso (MXN) stages a comeback against the US Dollar (USD) as the last month of the year begins, even though the Greenback posts solid gains against a basket of six currencies, namely the US Dollar Index (DXY). The USD/MXN slips below the confluence of technical support levels, which turned resistance, and trades below 17.30, down 0.71% on the day. The Mexican currency had a positive month in November, posting gains of 3.65%, a solid recovery compared to October's 3.60% losses. The main driver for price action continues to be interest rate differentials between both countries, with 600 basis points of spread favoring the Mexican Peso. In addition, market participants seem confident the US Federal Reserve (Fed) ended its tightening cycle after previously “hawks” members delivered dovish remarks. In the meantime, the release of the Fed’s preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE) Price Index, showed the disinflationary process in the US continued. USD/MXN traders are eyeing the Fed Chairman Jerome Powell's speech at 16:00 GMT. On the Mexican front, the Bank of Mexico (Banxico) revised its economic projections for 2023 and 2024, saying that inflation would reach its 3% target in 2025. Governor Victoria Rodriguez Ceja said discussions to ease monetary policy could begin in the first quarter of 2024. Deputy Governor Jonathan Heath emphasized the bank would be data-dependent and deliver gradual rate cuts. Ahead into the calendar, S&P Global would release the Manufacturing PMI. Daily digest movers: Mexican Peso on the offensive despite Banxico’s dovish remarks, await Fed Chair Powell Banxico revises economic growth upward from 3% to 3.3% for 2023 and projects the economy would rise from 2.1% to 3% in 2024. Regarding inflation prospects, the Mexican central bank foresees headline inflation at 4.4% in Q4 2023 (5.3% for core), while at the end of 2024, it is estimated at 3.4% (3.3% for core). The central bank forecasts headline and core inflation not to hit the 3% target imposed by the institution until 2025. The US Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s gauge for inflation, rose by 3.5% YoY in October, as expected, below the previous month’s 3.7%. Headline inflation measured by the PCE Price Index slowed from 3.4% to 3.0% in the last twelve months, as foreseen by analysts. Interest rate traders expect 115 basis points of rate cuts by the US Federal Reserve in 2024. On November 27, Banxico’s Deputy Governor, Jonathan Heath, commented that core prices must come down more, adding that one or two rate cuts may come next year, but “very gradually” and “with great caution.” On November 24, a report revealed the economy in Mexico grew as expected in the third quarter on an annual and quarterly basis, suggesting the Bank of Mexico would likely stick to its hawkish stance, even though it opened the door for some easing. Mexico's annual inflation increased from 4.31% to 4.32%, while core continued to ease from 5.33% to 5.31%, according to data on November 23. A Citibanamex poll suggests that 25 of 32 economists expect Banxico's first rate cut in the first half of 2024. The poll shows “a great dispersion” for interest rates next year, between 8.0% and 10.25%, revealed Citibanamex. The same survey revealed that economists foresee headline annual inflation at 4.00% and core at 4.06%, both readings for the next year, while the USD/MXN exchange rate is seen at 19.00, up from 18.95, toward the end of 2024 Technical Analysis: Mexican Peso picks up pace as USD/MXN slips below the 20, 100-day SMAs; 17.00 in sight The USD/MXN resumed its downtrend after briefly piercing above the 20 and 100-day Simple Moving Averages (SMAs) at 17.32 and 17.34, respectively, and reaching a two-week high shy of 17.50. Nevertheless, buyers were unable to cling to gains, and the pair has returned back below the 20 and 100-day SMAs. For a bearish continuation, the exotic pair needs to break below 17.25, a solid resistance level during the week that turned support. Once breached, the next support would be 17.05, ahead of the psychological 17.00 figure. If bulls regain the 20-day SMA, that could open the door for USD/MXN to reclaim the 100-day SMA at 17.34, ahead of challenging 17.50. Mexican Peso FAQs What key factors drive the Mexican Peso? The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity. How do decisions of the Banxico impact the Mexican Peso? The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. How does economic data influence the value of the Mexican Peso? Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate. How does broader risk sentiment impact the Mexican Peso? As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

The Bank of Canada (BoC) is set to announce its Interest Rate Decision next week.

The Bank of Canada (BoC) is set to announce its Interest Rate Decision next week. There is modest room for a hawkish (although short-lived) market reaction, in the view of economists at ING. Market impact shouldn’t be big this time Markets are pricing in 100 bps of cuts in 2024 in Canada, so it is likely that expectations are leaning towards a softening of the hawkish tone by the BoC at this meeting.  Ultimately, data – and the spill-over from Fed pricing – remain significantly more important for the CAD swap curve.  CAD may rise on a hawkish hold, but don’t expect the FX impact to be very long-lasting: we don’t see the Loonie as a particularly attractive currency into the first months of next year given its very high correlation to US data, which we expect to deteriorate in 1H24. Other commodity currencies like AUD and NOK are more appealing.  

EUR/USD declined below the 1.09 mark. Economists at Société Générale analyze the pair’s outlook.

EUR/USD declined below the 1.09 mark. Economists at Société Générale analyze the pair’s outlook.  The pace of EUR/USD appreciation should be gradual The 10Y Bund dropped to 2.395%, extending the correction to 60 bps from the October high. The decline in break-evens by 12 bps to 2.09% lopped 8 bps off the real 10Y yield to 33 bps. This pegged EUR/USD back below 1.0950 from a high of 1.1017. The return below 1.0915 could herald a deeper pullback. The drop in Eurozone inflation to 2.4% in November inevitably bolstered expectations that a first rate cut may happen sooner in 2024 than our house view for the end of next year. The drop in inflation means the real policy rate measured off the depo rate rose to 130 bps. This compares with 210 bps for the US (Fed effective rate of 5.33% minus CPI of 3.2%). Until the spread narrows, the pace of EUR/USD appreciation should be gradual.  

The economic activity in the US manufacturing contracted in November, for the 12th consecutive month, with the ISM Manufacturing PMI at 46.7, unchanged from October.

ISM Manufacturing PMI remained at 46.7 in November. US Dollar Index trimmed daily gains and fell to 103.50.  The economic activity in the US manufacturing contracted in November, for the 12th consecutive month, with the ISM Manufacturing PMI at 46.7, unchanged from October. This reading came in worse than the market expectation of 47.6. Key takeaways from the report: The Manufacturing PMI® registered 46.7 percent in November, unchanged from the 46.7 percent recorded in October. The overall economy continued in contraction for a second month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that. The New Orders Index remained in contraction territory at 48.3 percent, 2.8 percentage points higher than the figure of 45.5 percent recorded in October.  The Production Index reading of 48.5 percent is a 1.9-percentage point decrease compared to October’s figure of 50.4 percent.  The Prices Index registered 49.9 percent, up 4.8 percentage points compared to the reading of 45.1 percent in October.  The Backlog of Orders Index registered 39.3 percent, 2.9 percentage points lower than the October reading of 42.2 percent.  The Employment Index registered 45.8 percent, down 1 percentage point from the 46.8 percent reported in October. Market reaction The US Dollar Index pulled back modestly after the ISM report, falling toward the 103.50 area. However, EUR/USD remained near daily lows at 1.0850. 

Ulrich Leuchtmann, Head of FX and Commodity Research, shares his view about structural shifts in volatility.

Ulrich Leuchtmann, Head of FX and Commodity Research, shares his view about structural shifts in volatility. Will the situation of structurally low volatility persist? The clearer the interest rate picture becomes, the less likely major interest rate surprises are. And this also makes large exchange rate jumps less likely. Structurally, vola decreases. This does not apply to all currencies. In Japan we see a completely different interest rate cycle; in New Zealand, it is still not over; and in Switzerland, the intervention risk dominates, so the exchange rate is primarily an artificial product of the SNB. However, will the situation of structurally low volatility persist? I don't think so! The next interest rate cycle is sure to come. The market is already expecting interest rate cuts next year. These will not be synchronized either. Nor will they be of the same magnitude everywhere. And they are therefore likely to cause structurally high volatility again. The recent back and forth in EUR/USD, driven by Fed and ECB rate cut expectations, is a foretaste. And so, once again, I see my role as an FX analyst as being the admonisher who warns against ignoring FX risks in times of low FX volatility.  

United States ISM Manufacturing PMI below expectations (47.6) in November: Actual (46.7)

United States Construction Spending (MoM) above expectations (0.4%) in October: Actual (0.6%)

United States ISM Manufacturing Prices Paid above forecasts (46.2) in November: Actual (49.9)

United States ISM Manufacturing Employment Index down to 45.8 in November from previous 46.8

United States ISM Manufacturing New Orders Index up to 48.3 in November from previous 45.5

United States S&P Global Manufacturing PMI meets forecasts (49.4) in November

Dollar has fallen a little over 3% from its October highs. Economists at ING analyze Greenback’s outlook for the next year.

Dollar has fallen a little over 3% from its October highs. Economists at ING analyze Greenback’s outlook for the next year. Dollar to turn lower We think the Dollar should be due to a cyclical downturn next year.  Barring huge and unexpected risk premia emerging in the currency space, the dominant trend should be US growth converging on the weak levels seen in Europe and Asia, the Federal Reserve embarking on an easing cycle, and the Dollar falling 5-10%. That view does hinge on the Fed being able to cut rates and a clean bullish steepening trend playing out in the US yield curve.  The main threats to our Dollar view are enduring US economic strength or another identity crisis in the Eurozone – recall EUR/USD failed to rally in 2001, despite the Fed cutting nearly 500 bps.  

Economist at UOB Group Ho Woei Chen, CFA, assesses the latest PMI readings in the Chinese economy.

Economist at UOB Group Ho Woei Chen, CFA, assesses the latest PMI readings in the Chinese economy. Key Takeaways Both the official manufacturing and non-manufacturing PMIs continued to weaken in Nov against consensus expectation for a slight improvement after the National Day holidays in Oct. Despite the PBOC stepping up liquidity injections, activities have also failed to pick up.  Within the non-manufacturing sector, the construction activity index strengthened in response to the government’s support measures for infrastructure and the property sector but the services activity index tumbled into contraction for the first time this year. The economic momentum thus appears to be much weaker than expected.  The surge in liquidity injections and possible relaunch of the pledged supplementary lending (PSL) facility may delay further rate cuts to 1Q24 or even 2Q24. Thus, we push back our call for further interest rates cuts to 1Q24. Another 25 bps cut to banks’ reserve requirement ratio (RRR) may be delivered earlier to provide additional market liquidity.   

Economists at Wells Fargo expect the Australian Dollar to outperform next year.

Economists at Wells Fargo expect the Australian Dollar to outperform next year. Further monetary tightening cannot be ruled out We expect solid gains from the Australian Dollar as 2024 progresses.  While Australia's economic growth should slow next year amid an uncertain Chinese outlook, we do not expect an outright decline in activity. That is in contrast to the mild recession we forecast for the US, a relative growth performance that should support the Australian currency.  Moreover, with Australian inflation elevated and receding only gradually, the Reserve Bank of Australia has resumed hiking rates. Further monetary tightening cannot be ruled out, and rate cuts are unlikely until late next year. Australian monetary easing should lag that of the Fed and, together, relative growth and monetary policy trends should be supportive of the AUD in 2024.  

Canada S&P Global Manufacturing PMI fell from previous 48.6 to 47.7 in November

- EUR/USD continues to lose momentum below 1.0900. - Extra decline could revisit the key 200-day SMA near 1.0820.

- EUR/USD continues to lose momentum below 1.0900.- Extra decline could revisit the key 200-day SMA near 1.0820.EUR/USD weakens further and extends the recent breakdown of the key 1.0900 support on Friday. The continuation of the downtrend could retest a minor support at the weekly low of 1.0852 (November 27). The loss of this level could put a potential test of the critical 200-day SMA, today at 1.0817, back on the radar sooner rather than later. So far, while above the significant 200-day SMA, the pair’s outlook should remain constructive. EUR/USD daily chart  

Economists at UOB Group Enrico Tanuwidjaja and Sathit Talaengsatya comment on the latest BoT monetary policy meeting.

Economists at UOB Group Enrico Tanuwidjaja and Sathit Talaengsatya comment on the latest BoT monetary policy meeting. Key Quotes As widely expected, the Bank of Thailand (BOT)’s Monetary Policy Committee (MPC) voted unanimously to keep the policy rate unchanged at 2.50% at its final meeting for 2023 on 29 Nov, citing that the current rate was appropriate in the context of ongoing economic recovery. The MPC also signaled that the policy rate would remain elevated in the periods ahead as growth was approaching its potential trajectory amid well-anchored inflation expectations within the BOT’s target range of 1% -3%.   However, the MPC became less sanguine on the outlook and further revised down its growth forecast for 2023 to 2.4% from 2.8% projected in Sep due primarily to a softer external demand and a slower-than-expected rebound of tourism compounded by China's uncertain economic recovery. In 2024, the growth projection was also revised down to 3.8% from 4.4%, including the boost of the digital wallet policy, and excluding the impact of the policy, growth was projected to expand only by 3.2%. On the inflation outlook, the headline inflation was projected to remain low at 1.3% in 2023 and 2.0% in 2024. However, if the impact of the digital wallet policy was included, headline inflation was projected to accelerate to 2.2% for 2024, compared to the previous projection of 1.6% for 2023 and 2.6% for 2024.   We maintain our view that the BOT has reached its neutral rate at 2.50% for its current rate-hiking cycle and the policy rate should stay unchanged in 2024 due to its concerns on macro-financial stability and the need to maintain sufficient policy space. In addition, the central bank reiterated the need to keep the policy rate consistent with the economic potential to achieve macroeconomic stability in the long term.

DXY advances for the third session in a row and hovers around the 103.60 zone at the end of the week.

DXY keeps pushing harder and flirts with the 103.60 area.The surpass of the 200-day SMA opens the door to extra gains.DXY advances for the third session in a row and hovers around the 103.60 zone at the end of the week. If the key 200-day SMA around 103.60 is cleared, the index is expected to face more sustained gains to, initially, the weekly top of 104.21 (November 22) prior to the temporary 100-day SMA at 104.34. In the meantime, above the key 200-day SMA, the outlook for the index is expected to shift to bullish. DXY daily chart \  

Economists at TD Securities explore the recent drivers of CAD and make the case that it will appreciate vs.

Economists at TD Securities explore the recent drivers of CAD and make the case that it will appreciate vs. the USD. Canada will not be immune to a slowing US, but it has some offsets We inspect the drivers of CAD and show that while it has conventionally been considered an Oil currency, the importance of that factor has declined over time. In fact, risk sentiment and the broad USD are much more relevant for USD/CAD. Canada has heavy trade and economic links to the US and has outperformed non-USD peers on the US exceptionalism trade. We see this reversing into next year as the US catches down to the rest of the world. In terms of domestic vulnerabilities, upcoming mortgage renewals will keep a lid on household consumption. However, Canada will have tailwinds from two offsetting factors, namely population growth and excess savings. We expect CAD to appreciate into next year on our broad USD outlook, but it is unlikely to be the G10 outperformer. We think CAD should lag on crosses, especially ones linked to the improving China outlook like AUD.  

Gold price achieved a seven-month high of around $2,050 this week.

Gold price achieved a seven-month high of around $2,050 this week. Economists at Commerzbank analyze the yellow metal’s outlook. There will doubtless be little in the way of upside potential on Gold  According to the Fed Fund Futures, market participants now expect the first 25 bps rate cut to be implemented by the Fed by May. 50 bps of rate cuts by mid-2024 are priced in. We believe that the market is getting ahead of itself here: our economists don’t expect to see the first Fed rate cut until the third quarter of 2024. We therefore envisage downside potential for the Gold price in the coming months if the rate cut expectations for the first half of 2024 – which we regard as premature – have to be scaled back.  As we are confident that the Fed will lower its interest rates quite significantly in the second half of next year though, namely by a total of 100 bps, the Gold price should then be able to gain again and climb to a new all-time high of $2,100.  

The Swiss Franc (CHF) weakens on Friday after the publication of mixed GDP data for the third quarter.

The Swiss Franc weakens after Q3 GDP data comes out mixed – YoY missing estimates; QoQ beating.CHF finds a floor against US Dollar as sentiment improves for the Greenback. EUR and GBP stabilize against Swiss Franc after a steep sell-off. The Swiss Franc (CHF) weakens on Friday after the publication of mixed GDP data for the third quarter. On a YoY basis, the Swiss economy grew by 0.3% in Q3 versus the 0.5% expected, according to the State Secretariat of Economic Affairs. Quarter-on-quarter, however, GDP gained more than expected, helping to balance out the poor YoY result.  Most of the Swiss Franc’s major pairs found a floor on Friday after ferocious sell-offs. USD/CHF may have hammered out a low after a turnaround in bearish sentiment towards the US Dollar. EUR/CHF halted its steep decline after the Swiss GDP data. GBP/CHF likewise seems to have halted its decline.  Daily digest market movers: USD/CHF rebounds after USD finds favour The Swiss Franc weakens marginally after Swiss GDP growth in Q3 came out lower than analysts had forecast on a YoY basis – 0.3% vs 0.5% expected.  The QoQ figure, however, showed an unexpected 0.3% gain versus the 0.1% expected and the 0.1% decline previously.  The US Dollar recouped earlier losses from lower-than-expected PCE inflation data and surprise dovish commentary from Federal Reserve Board Member Christopher J. Waller.  With global data dipping and inflation cooling in most major economies, investors now see interest rates at risk of coming down all over the world, not just in the US.  Commentary from Federal Reserve Chair Jerome Powell on Friday is being eyed for further guidance prior to the next Fed meeting’s blackout period begins.    Swiss Franc technical analysis: USD/CHF hammers out a floor USD/CHF – the number of Swiss Francs that one US Dollars can buy – is an overall downtrend on the short and medium-term timeframes, and in a long-term range.  Overall, the trend is biased to extend lower. The next major target to the downside is the round number level at 0.8600, followed by the 2023 low of 0.8552. A break below Thursday’s 0.8683 lows would provide bearish confirmation. US Dollar vs Swiss Franc: Daily Chart The pair has just found a floor at key long-term range lows and formed a textbook hammer Japanese candlestick pattern on Thursday. If Friday ends bullishly and closes above Wednesday’s open at 0.8780, it would confirm the hammer reversal and probably signal the beginning of a short-term recovery for the pair.  It is possible the pair has formed a measured move price pattern since the October 3 highs (see chart above). Measured moves are three wave patterns that look like large zig-zags. The first and third waves are usually of a similar length. If this is the case, then there is a possibility wave C may have completed. This would suggest a lull in selling pressure and the possibility of a short-term recovery. Given price has not started rising very strongly yet, however, this is still highly speculative, and the trend remains down. Daily digest market movers: EUR/CHF ends blood-letting as ECB officials play down rate cuts The Swiss Franc weakened after Swiss GDP data failed to meet estimates in Q3 on a YoY basis. QoQ GDP data, however, beat estimates, helping to balance out the figures.  The Euro weakened considerably on Thursday after flash estimates showed the Eurozone Harmonised Index of Consumer Prices (HICP) inflation decelerated more than anticipated, to 2.4% YoY in November from 2.9% in the previous month.  Core Eurozone HICP increased by 3.6%, substantially down from October’s final print of 4.2% and missing market expectations for a 3.9% rise.  The data suggested a risk the European Central Bank (ECB) might consider cutting interest rates, and weighed heavily on the Euro. Lower interest rates tend to weaken a currency as they lead to lower capital inflows.  Despite the lower-than-expected inflation data, ECB officials have said that it may be too early to reduce interest rates.   Swiss Franc technical analysis: EUR/CHF sell-off abates EUR/CHF – the number of Swiss Francs that one Euro can buy – fell off a cliff midweek and into Thursday. As the week comes to a close, however, it has recovered some ground and is now trading just above a major support and resistance line at 0.9520, which held up prices during the summer. Euro vs Swiss Franc: Daily Chart The pair is in a downtrend on all timeframes, suggesting bears have the upper hand and prices should continue lower.  A break below the 0.9470 lows would confirm the bearish bias and see prices fall to the next key support area at the 0.9417 October lows.  Daily digest market movers: GBP/CHF remains supported by hawkish outlook for BoE The Swiss Franc loses ground against the Pound Sterling on Friday after mixed Swiss GDP data. Bank of England officials are maintaining a hawkish line as inflation in the UK remains well above target, supporting the Pound. Interest rate-setter Megan Greene from the Bank of England expressed concerns about persistently high inflation, indicating that interest rates might need to remain elevated for an extended duration. This perspective contrasts with some recent data suggesting a potential downturn in the economy.  Swiss Franc technical analysis: GBP/CHF bouncing around on long-term range floor GBP/CHF – the number of Swiss Francs that one Pound Sterling can buy – is broadly in a sideways trend. Thursday’s sell-off found a floor at 1.1000, a significant long-term support level and the bottom of the range.  The pair is currently trading just above support from the 50-day Simple Moving Average (SMA, Red).  Pound Sterling vs Swiss Franc: Daily Chart Buyers and sellers are evenly balanced. A buy signal from MACD on the weekly chart coincided with the October lows. This was followed by the recovery witnessed in late October and early November. There is a chance of this move continuing. A break above the 1.1150 highs and the consolidation zone formed in early November would provide confirmation of further upside, which could see the pair claw its way back up to the long-term range highs just below 1.1500.   Swiss Franc FAQs What key factors drive the Swiss Franc? The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. How do decisions of the Swiss National Bank impact the Swiss Franc? The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. How does economic data influence the value of the Swiss Franc? Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate. How does the Eurozone monetary policy affect the Swiss Franc? As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.

The USD is ending the week and starting the month somewhat on the defensive versus most major currencies.

The USD is ending the week and starting the month somewhat on the defensive versus most major currencies. Economists at Scotiabank analyze Dollar’s outlook. Relatively light data schedule ahead of the weekend for US markets Despite Thursday’s recovery in the USD, headwinds – lower yields specifically but seasonal trends in December and broadly bearish technicals – all suggest more USD softness ahead in the next few weeks and perhaps beyond. There is a relatively light data schedule ahead of the weekend for US markets (just Construction Spending and ISM Manufacturing). But the calendar is beefed up substantially by speaking engagements for Fed Governor Goolsbee, Chairman Powell and Governor Cook). These are the last scheduled Fed comments ahead of the blackout for the December 13th FOMC.  

Canada Unemployment Rate meets expectations (5.8%) in November

Canada Net Change in Employment registered at 24.9K above expectations (15K) in November

Canada Participation Rate remains unchanged at 65.6% in November

The US Dollar is attempting a recovery from 2, ½-month lows at 146.65 favoured by a mild recovery on US Treasury yields, which is weighing on the Japanese Yen.

The US Dollar trims losses and approaches resistance at 148.70.Higher US yields are supportring the USD ahead of Powell's speech.Hopes of some BoJ monetary policy normalisation in 2024 are expecte to underpin the Yen.
The US Dollar is attempting a recovery from 2, ½-month lows at 146.65 favoured by a mild recovery on US Treasury yields, which is weighing on the Japanese Yen. The broader trend, however, remains negative as the soft US inflation and the somewhat weaker macroeconomic data have practically confirmed the end of the Federal Reserve’s tightening cycle.
All eyes are on Fed Powell's conference
Also on Thursday, the New York Fed President, John Wiliams, suggested that interest rates might be at their peak endorsing that view. In this context, Fed Chairman Powell’s conference due later today will be analysed in detail to assess the bank’s next steps.

On the other hand, increasing expectations that the Bank of Japan will exit its ultra-loose monetary policy in 2024 are providing some support to the JPY.

From a wider perspective, the pair maintains the bearish bias from mid-November highs near 152.00, with resistance at 148.75 highly likely to cap bulls ahead of the November 22 and 23 highs at 149.75. Supports are 147.77 and 146.65. Technical levels to watch  

CAD has extended gains on USD to low 1.35s. Economists at Scotiabank analyze Loonie’s outlook.

CAD has extended gains on USD to low 1.35s. Economists at Scotiabank analyze Loonie’s outlook. Soft undertone into the end of the week USD/CAD gains were capped in the low 1.36s on Thursday and the CAD’s firm rebound from its intraday low leaves the USD trading with a soft undertone into the end of the week.  USD/CAD losses extended to test the 200-DMA area (1.3517) earlier while the USD has steadied, the absence of a more significant rebound keeps the technical focus on the downside and a test of the figure area (50% Fib retracement of the July/November rally at 1.3495). A push through here targets 1.34.  Resistance is 1.3600/1.3620 and 1.3650/1.3660.  

Brazil S&P Global Manufacturing PMI climbed from previous 48.6 to 49.4 in November

South Africa Total New Vehicle Sales dipped from previous 45445 to 43.281 in November

EUR/JPY alternates ups and downs around 161.30 on Friday, extending the consolidative mood in the lower end of the recent range.

EUR/JPY appears side-lined in the low 161.00s on Friday.Further losses should face provisional support near 159.60.EUR/JPY alternates ups and downs around 161.30 on Friday, extending the consolidative mood in the lower end of the recent range. The continuation of the downward bias carries the potential to motivate the cross to break below the 160.00 round level and revisit the interim 55-day SMA at 159.58. So far, the longer term positive outlook for the cross appears favoured while above the 200-day SMA at 153.64. EUR/JPY daily chart  

Gold Prices are trading sideways on Friday, with bulls capped below the $2,045 resistance area with the $2,030 level containing downside attempts so far.

XAU/USD is trading sideways with bears limited above $2,030. Gold is losing momentum with US Treasury yields are picking up. A dovish Powellmight send Gold higher. Gold Prices are trading sideways on Friday, with bulls capped below the $2,045 resistance area with the $2,030 level containing downside attempts so far.
US Yields picking up from lows US Treasury yields are picking up from multi-week lows, which has cushioned US Dollar weakness after the softer inflation levels seen on Thursday and added negative pressure on the precious metal.

Today the spotlight is on the Federal Reserve’s Chairman, Jerome Powell who is speaking at Spielman College in Atalanta. Powell will not mention rate cuts but the investors will be attentive for signals of a dovish turn, which would give a fresh impulse to Gold higher.

From a technical perspective, the XAU/USD maintains the bullish trend intact while above the $2,030 and $2,010 support levels. Below here, the next target is $1,985. Resistances are $2,045 and 2,066. Technical Levels to Watch  

GBP/USD holds above 1.26. Economists at Scotiabank analyze the pair’s outlook.

GBP/USD holds above 1.26. Economists at Scotiabank analyze the pair’s outlook. EUR/GBP soft tone extends to test 0.86 Weakness through 1.2625 ahead of the weekend will signal another run at the figure at least.  Loss of (minor) support around 1.2600/1.2605 should see Cable losses extend towards the mid-1.25s.  Resistance is 1.2665/1.2675. EUR/GBP continued its sharp retreat to test 0.86, the lowest since mid-September. More GBP outperformance looks likely here after the Pound’s sloid, late November reversal against the EUR. See – EUR/GBP: Room open to further falls – MUFG

EUR/USD pivots around 1.09. Economists at Scotiabank analyze the pair’s outlook.

EUR/USD pivots around 1.09. Economists at Scotiabank analyze the pair’s outlook. Euro consolidates recent gains Final Eurozone Manufacturing PMI data was revised up slightly to 44.2, from the preliminary November reading of 43.8. German and French data were revised up while Spain reported a stronger-than-expected 46.3 for the month. Italy’s 44.4 result was, however, below forecasts. EUR/USD continues to consolidate.  Recent gains in spot look a little overcooked and corrective losses to the 1.09 area risk extending a little further in the short run to perhaps test 1.0825/1.0850.  Intraday resistance is 1.0920/1.0925. Support is 1.0880.  

The US Dollar (USD) bulls have made a staggering comeback this week. At one point the US Dollar Index (DXY) was even trading in the green on the weekly time frame. The main driver is the rate

The Greenback trades a touch softer after its firm move up on Thursday.US traders are set to hear from US Fed Chairman Powell ahead of the blackout period.The US Dollar Index is steady above 103 and just a sigh away from ending the week in the green.The US Dollar (USD) bulls have made a staggering comeback this week. At one point the US Dollar Index (DXY) was even trading in the green on the weekly time frame. The main driver is the rate differential between the US and the rest of the world. This got a bit bigger again after the recent plunge in US rates. These too recovered this week. On the economic front, two main elements could still add some US Dollar strength to this week's move. The first is a speech from US Federal Reserve Chairman Jerome Powell right at the end of this trading day and the second a different set of numbers from the Institute of Supply Management. Should both elements turn out in favour of the Greenback, expect to possibly even see a close above 104 this evening at the US closing bell. Daily digest: Powell to choose sidesAround 14:45 GMT the day kicks off with the S&P Global Purchase Manufacturing Index (PMI) for Manufacturing. Previous was at 49.4, a stand still is expected. Near 15:00 GMT this week’s last batch of data will be released: Construstruction Spending for the month is due to come out: Previous was at 0.4% and it is expected to remain unchanged. The Institute for Supply Management (ISM) will release its figures with the Employment Index for November: Previous was at 46.8 and forecast is for 47.2. ISM Manufacturing New Orders Index is expected to head from 45.5 to 46.7. ISM Manufacturing PMI will rise from 46.7 to 47.6. ISM Manufacturing Prices Paid is to soar from 45.1 to 46.2. Fed speakers this Friday as it is the last moment before the blackout period ahead of the last Fed rate decision for 2023. Austan Goolsbee from the Chicago Fed is due to speak nar 15:00 GMT. Fed Chairman Jerome Powell is due to speak nar 16:00 GMT. Chairman Powell will speak again at 19:00 GMT. Lastly Lisa Cook from the Fed’s board of governors will speak as well around 19:00 GMT. Right at the end of this Thursday, the US Treasury is heading to markets to allocate a 4-week bill.  Equities are sliding lower with the Hang Seng having a very bad week this week: again down over 1%. European and US equities are mildly in the green.  The CME Group’s FedWatch Tool shows that markets are pricing in a 99.4% chance that the Federal Reserve will keep interest rates unchanged at its meeting in December.   The benchmark 10-year US Treasury Note trades at 4.31%, and steady off this week’s low.US Dollar Index technical analysis: flipping overThe US Dollar is holding good cards here to take the upper hand this week and end its losing streak. US Fed Chairman Jerome Powell will need to choose if he backs the dovish comments from Fed’s Governor Christopher Waller, or sticks with the steady-for-longer view from San Francisco Fed’s Mary Daly. The latter could be enough to shoot the US Dollar Index (DXY) back above 104. The DXY is making its way up towards the 200-day Simple Moving Average (SMA), which is near 103.58. The DXY could still make it through  there, should Powell comments be enough for another push higher. A two-tiered pattern of a daily close lower followed by an opening higher would quickly see the DXY back above 104.28, with the 200-day and 100-day SMA turned over to support levels.  To the downside, historic levels from August are coming into play, when the Greenback summer rally took place. The lows of June make sense to look for some support, near 101.92, just below 102. Should more events take place that initiate further declines in US rates, expect to see a near full unwind of the 2023 summer rally, heading to 100.82, followed by 100.00 and 99.41. US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

Economist at UOB Group Lee Sue Ann reviews the latest interest rate decision by the RBNZ.

Economist at UOB Group Lee Sue Ann reviews the latest interest rate decision by the RBNZ. Key Quotes As expected, the Reserve Bank of New Zealand (RBNZ) decided to leave its official cash rate (OCR) unchanged at 5.50% at its Nov meeting. In its accompanying press release, the RBNZ said that “interest rates are constraining economic activity and reducing inflationary pressure as required”.  3Q23 GDP figures will be due on 14 Dec. But, overall, we forecast New Zealand’s GDP growth to slow to 0.9% in 2024, from 1.1% in 2023. As for inflation, our forecast for 2023 is at 5.7%. For 2024, we expect inflation to ease further to 3.0%.  Tighter fiscal policy will further weigh on growth, though most fiscal measures will likely be announced only during the May 2024 budget, and implementation likely to take some time. Nonetheless, we think the RBNZ will have to cut rates sooner than its own projections imply. 

Economists at ING do not expect European currencies to lead the pack of appreciation against the US Dollar.

Economists at ING do not expect European currencies to lead the pack of appreciation against the US Dollar. European currencies set to lag We think the Dollar story will be enough to drag EUR/USD higher through 2024 – 1.15 is our year-end target – but the moves should be relatively modest.  EUR/USD will be trying to rally while the Eurozone is in recession. It will also face the challenge of an increasingly dovish European Central Bank if our call is correct for the first ECB rate cut in June. And weak Eurozone growth typically spells trouble for some of the Eurozone's peripheral government bond markets too.  As to the Pound, a 100 bps Bank of England easing cycle will create headwinds for GBP/USD. We do not foresee the UK election demanding a big risk premium of the Pound, but we doubt it will provide a tailwind either.  

The US Dollar drops further as US PCE confirms the disinflationary trend.

The US Dollar drops further as US PCE confirms the disinflationary trend.All eyes today are on Fed Powell's conference.Soft Canadian data and lower oil prices are likely to weigh on the CAD.The US Dollar was rejected at the 1.3625 resistance area on Thursday and resumed its broader downtrend against its Canadian counterpart reaching two-month lows near 1.3500 so far. Lower inflation hints at end of the Fed's hiking cycle  US PCE Prices Index data released on Thursday endorsed the lower inflation and softer macroeconomic scenario seen over the last week. This has boosted confidence that the Fed has reached its terminal rate and is acting as a headwind for US Dollar bulls.

Later today, Chairman Powell and other US Fewd officials are hitting the press and their comments will be observed with special interest. Any signal towards a dovish turn on the bank’s forward guidance is likely to increase bearish pressure on the pair.

In Canada November’s employment figures are expected to show that the labour market is softening, which, coupled with the weak GDP data seen on Thursday and the lower oil prices might keep CAD upside attempts limited.

Technical indicators are negative with the RSI still above oversold levels. The next supports are 1.3500 and the September 29 low at 1.3420. On the upside, resistances are at the mentioned 1.3615 and 1.3700. Technical levels to watch  

Silver is projected to do well as it trends toward $26, strategists at TD Securities report.

Silver is projected to do well as it trends toward $26, strategists at TD Securities report. Dovish pivot, economic recovery and electrification positives for Silver The pending reversal of hawkish monetary policy should help catalyze more supportive flows in early 2024, after it becomes clear that the Fed and other central banks will pivot to a more dovish monetary policy stance. We judge the actual policy tilt toward a more dovish stance will start in June 2024, but markets should react positively many months before this happens. Once an economic recovery is on the horizon, the white metal should get an additional boost from the industrial side, which could see the white metal target $26 mid-2024. At that time, lower interest rates, firmer physical investment, ETP purchases and industrial demand will work together to tighten market conditions. Given the lack of mining capacity, its more intensive use in electric vehicles, and growing demand from solar panels as the world transitions into a net zero economy, there will be a structural component working along with lower rates and cyclical demand increases next year.  

India FX Reserves, USD increased to $597.94B in November 24 from previous $595.4B

India Bank Loan Growth climbed from previous 20.4% to 20.6% in November 20

Brazil Industrial Output (YoY) below expectations (1.3%) in October: Actual (1.2%)

Brazil Industrial Output (MoM) registered at 0.1%, below expectations (0.3%) in October

EUR/USD has returned to 1.09. Economists at ING analyze the pair’s outlook.

EUR/USD has returned to 1.09. Economists at ING analyze the pair’s outlook. Adverse short-term rate spread Markets are now pricing in a first ECB cut in April, and further dovish repricing will become harder from this point on. However, that won’t be necessary to put pressure on EUR/USD if short-term differentials reconnect with the pair.  The 2-year EUR-USD swap spread is now at 178 bps the lowest since December 2022, when EUR/USD was at 1.05. See: The coming monetary policy phase should be rather favorable for EUR – Commerzbank

Oil prices are starting to wobble and could start to sell-off as markets clearly are disappointed by the deal delivered on Thursday by OPEC+.

WTI Oil steady near $76, failed to breach $80 on Thursday.The US Dollar is flat for this week and might flip into a positive performance on Powell comments.Oil could sink lower now that markets are lacking conviction of further upside in Oil prices. Oil prices are starting to wobble and could start to sell-off as markets clearly are disappointed by the deal delivered on Thursday by OPEC+. It almost seemed the deal was constructed out of duct tape and some kids glue, with Russia being the only parent in the room to save the deal. The split division clearly has bitten into OPEC+’s credibility and might put questions going forward on if a price floor in Oil  is manageable by the group seeing their recent lacklustre performance.  The US Dollar (USD) meanwhile is soaring and erased all losses from the past week. With just one trading day left, the week could still close in the green for the US Dollar Index (DXY). All eyes will be on US Federal Reserve (Fed) Chairman Jerome Powell who will speak twice this Friday ahead of the Fed’s official blackout period prior to its last rate decision for 2023. Crude Oil (WTI) trades at $76.17 per barrel and Brent Oil trades at $80.87 per barrel at the time of writing. Oil news and market movers: OPEC+ dropped the ballIndia is shoring up its Oil imports, with a restart of imports of Venezuelan Oil after a three-year drought. More India news on the wires as it has increased Oil imports from Russia and Iraq in the last month as refiners are looking for stock with soaring production demand in place.  Market analysts remain very sceptical in the aftermath of the OPEC+ meeting on Thursday. The cuts are not enough and remain voluntary, which is not enough to create a substantial floor in the price of Oil. COP28 is now taking place in Dubai with all big leaders of state having arrived overnight. headlines are expected to come out throughout this Friday and over the weekend. Oil Technical Analysis: Done and dustedOil prices have had a wild ride on Thursday, though looking back the credibility of OPEC+ has been dented. The fact that Russia had to step in and take one third of the supply cuts, circumventing Angola and Nigeria refusing to comply with any production cuts whatsoever, shows that the group is missing a leader who can create momentum and decisive decision making. Expect markets to send Oil further south as the placement of a price cap by OPEC+ has failed and will see more downturn as of this week. On the upside, $80.00 is the resistance to watch out for. Should crude be able to jump above that again, look for $84.00 (purple line) as the next level to see some selling pressure or profit taking. Should Oil prices be able to consolidate above there, the topside for this fall near $93.00 could come back into play. On the downside, traders are seeing a soft floor forming near $74.00. This level is acting as the last line of defence before entering $70.00 and lower. Watch out for $67.00 with that triple bottom from June as the next support level to trade at.  US WTI Crude Oil: Daily Chart WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

Pound bulls fail to extend beyond 1.2670. UK Manufacturing PMI beats expectations in November.

 Pound bulls fail to extend beyond 1.2670.UK Manufacturing PMI beats expectations in November.The US Dollar ticks up with all eyes on Fed Powell.Sterling’s rebound seen after the better-than-expected manufacturing data has been short-lived. Bulls have been capped at 1.2675, which leaves the pair in no man’s land with the near-term upside trend losing steam. UK manufacturing data fails to boost the Pound
UK S&P  Global/CIPS Manufacturing PMI improved to 47.2 in November, from 46.7 in October, beyond expectations of a 46.6 reading. Earlier today Nationwide revealed that housing prices increased against expectations in November.

On the other hand, the US Dollar has ticked up from session lows, with te marke bracing for a slew of Fed speakers later today with a special interest on Fed Chairman, Jerome Powell. This is weighing on GBP bulls.

From a technical perspective, the near term remains positive yet price action shows hesitation below 1.2700. The “Evening star” candle pattern in the daily chart suggests the possibility of a downside correction.

Immediate resistance is at 1.2627 ahead of November’s high, at 1.2730. On the downside, supports are 1.2590 and 1.2410.

Technical levels to watch    

EUR/GBP has declined to the lower end of the 0.86-0.87 range.

EUR/GBP has declined to the lower end of the 0.86-0.87 range. Economists at MUFG Bank analyze the pair’s outlook. Risks are skewed to the downside The market is now priced for the BoE to cut by 25 bps in August next year which is later than both the ECB and the Fed.  The shift in thinking on the ECB given the recent evidence of faster declines in inflation does leave EUR/GBP open to further falls as a divergence in inflation and therefore policy expectations widens further. EUR/GBP has dropped through its 50, 100 and 200-DMAs in the last five trading days and risks are skewed to the downside for now.  

The resumption of the selling pressure in USD/CNH should face a key obstacle at 7.1100 for the time being, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

The resumption of the selling pressure in USD/CNH should face a key obstacle at 7.1100 for the time being, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: We expected USD to trade in a sideways range of 7.1250/7.1550 yesterday. Our view of sideways trading was not wrong, even though USD traded in a wider range of 7.1232/7.1569 before ending the day little changed at 7.1459 (+0.04%). The price action offers no fresh clues, and we continue to expect USD to trade sideways, likely between 7.1280 and 7.1585. Next 1-3 weeks: Our update from yesterday (30 Nov, spot at 7.1335) still stands. As highlighted, the USD weakness from two weeks ago is intact, and the level to monitor is still at 7.1100. However, if USD breaches 7.1660 (no change in ‘strong resistance’ level from yesterday), it would mean that the USD weakness has stabilised. 

Bond markets finished November with a flourish. Economists at Société Générale analyze December’s seasonality.

Bond markets finished November with a flourish. Economists at Société Générale analyze December’s seasonality.  Seasonality could spoil year-end bond rally Stretched technicals and the bearish turn in bond seasonals could prompt investors to lock in profits in case yields back up in December. This may, however, not be enough to lift the Dollar off the lows.  Seasonals are bearish USD in December against a range of currencies. Average decline DXY last 10 years is 0.8%, seasonals bullish Euro, SEK, GBP, CHF, CEE, KRW. Mixed AUD, CAD, JPY, MXN, ZAR, INR.

The US Dollar depreciation has been substantial – we have entered the final month of 2023 and in November, we had a sharp drop for the USD of 3.0%.

The US Dollar depreciation has been substantial – we have entered the final month of 2023 and in November, we had a sharp drop for the USD of 3.0%. Economists at MUFG Bank note that There is a seasonal bias that is quite compelling for EUR/USD in December.  Quite compelling seasonal bias for EUR/USD in December There is a seasonal bias that is quite compelling for EUR/USD in December – 14 Decembers from the last 20 years have seen a higher EUR/USD with an average gain over those 14 occasions an impressive 2.6%. If we exclude December 2008 (+10.1%), the average gain over the other 13 occasions was still substantial at 2.0%. Furthermore in 8 of the 11 occasions when EUR/USD moved higher in November it was followed by a December gain. But this doesn’t mean we can ignore the fundamentals and certainly the prospects of that seasonal bias being evident in December 2023 would be helped if we began to see US economic activity slow. Without that, investor’s optimism over the recent inflation declines may not persist.  

Considering advanced prints from CME Group for natural gas futures markets, open interest remained choppy and went up by around 19.5K contracts on Thursday.

Considering advanced prints from CME Group for natural gas futures markets, open interest remained choppy and went up by around 19.5K contracts on Thursday. In the same direction, volume resumed the uptrend and increased by around 32.4K contracts. Natural Gas: Next on the downside comes $2.600 Prices of natural gas seems to have entered a consolidative phase in the lower end of the monthly range. Thursday’s inconclusive price action came in tandem with rising open interest and volume and exposes further side-lined trading in the very near term. In the meantime, the key 200-day SMA near the $2.600 region per MMBtu continues to hold the downside for the time being.

Gold price climbs to a seven-month high on the back of rate cut expectations.

Gold price climbs to a seven-month high on the back of rate cut expectations. Economists at Commerzbank analyze the yellow metal’s outlook. Current expectations of Fed rate cuts of 50 bps by mid-2024 are more likely to be disappointed The upswing on the Gold market has continued this week, the Gold price almost regaining its May yearly high. Any further upside potential is probably limited, however. This is because the current expectations of Fed rate cuts of 50 bps by mid-2024 are more likely to be disappointed.  Accordingly, we also envisage a correction on the Gold market. This could be triggered by the US labour market report at the end of the week.  

USD/CAD continues its decline and trades below the mid-1.35s.

USD/CAD continues its decline and trades below the mid-1.35s. Economists at Société Générale analyze the pair’s technical outlook.  Recent pivot high at 1.3760 could provide resistance USD/CAD recently breached the ascending channel since July and gave up the 50-DMA denoting regain of downward momentum. This is also highlighted by daily MACD which has entered negative territory.  The pair is drifting towards next projections of 1.3500/1.3480; this could be interim support. An initial bounce is likely however recent pivot high at 1.3760 could provide resistance.  Failure to defend 1.3500/1.3480 can extend the down move towards September low of 1.3385 and 1.3280.  

Gold prices fell in India on Friday, according to data from India's Multi Commodity Exchange (MCX).

Gold prices fell in India on Friday, according to data from India's Multi Commodity Exchange (MCX). Gold price stood at 62,442 Indian Rupees (INR) per 10 grams, down INR 85 compared with the INR 62,527 it cost on Thursday. As for futures contracts, Gold prices increased to INR 62,871 per 10 gms from INR 62,640 per 10 gms. Prices for Silver futures contracts decreased to INR 77,959 per kg from INR 77,515 per kg. Major Indian city Gold Price Ahmedabad 64,645 Mumbai 64,475 New Delhi 64,570 Chennai 64,620 Kolkata 64,645 Global Market Movers: Comex Gold price resumes its uptrend amid subdued USD demand Bets that the Federal Reserve will not hike rates again and may start easing its monetary policy by the first half of 2024 continue to lend some support to the non-yielding Gold price. The CME group's FedWatch Tool indicates an even possibility that the Fed will cut policy rates as early as March 2024 and a near 80% chance of such a move at the May FOMC meeting. The bets were reaffirmed by the key inflation data on Thursday, which showed that the Personal Consumption Expenditures (PCE) Price Index remained unchanged in October. Over the 12 months, the PCE Price Index registered the smallest year-on-year increase since March 2021 and decelerated from 3.4% to 3.0% during the reported month. Moreover, the gauge that strips out volatile food and energy prices rose by a modest 0.2% in October and saw an annual rise of 3.5%, further pointing to signs of easing inflation. Another report showed that Jobless Claims rose to 218K last week and 1.93 million people were collecting unemployment benefits the week that ended November 18 – the most in two years. New York Fed President John Williams said on Thursday that it will be appropriate to maintain a restrictive stance for quite some time to bring inflation back to the 2% target. San Francisco Fed President Mary Daly noted that interest rates are in a very good place to control inflation, though she is not thinking about cuts and that it was too soon to say if hikes are finished. Given the recent mixed signals, the market attention will remain glued to Fed Chair Jerome Powell's speech, which could infuse some volatility and provide a fresh impetus to the XAU/USD. Traders will also confront the release of the US ISM Manufacturing PMI, which is expected to improve to 47.6 in November, though remains in contraction territory for the 12th straight month.(An automation tool was used in creating this post.)Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

United Kingdom S&P Global/CIPS Manufacturing PMI came in at 47.2, above forecasts (46.6) in November

EUR/CHF has seen some sharp losses this week to dip below the 0.95 mark.

EUR/CHF has seen some sharp losses this week to dip below the 0.95 mark. Economists at ING analyze the pair’s outlook. Were EUR/CHF to fall too sharply, the SNB would probably flip from being an FX seller to an FX buyer We do not see the case for a substantially lower EUR/CHF. Yes, the Swiss National Bank (SNB) has been driving it lower through FX sales, yet we argue that the SNB’s desire for a stronger Swiss Franc will wane. This is because the inflation differential to major trading partners is narrowing quickly and means less need for a stronger CHF to keep the real exchange rate stable. We tend to think EUR/CHF will hover around the 0.95 level for most of next year. Were EUR/CHF to fall too sharply, the SNB would probably flip from being an FX seller to an FX buyer.  

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang expect USD/JPY to trade between 146.65 and 149.30 in the near term.

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang expect USD/JPY to trade between 146.65 and 149.30 in the near term. Key Quotes 24-hour view: Yesterday, we held the view that “there is scope for USD to dip to 146.50 before a more sustained recovery is likely.” However, USD rebounded strongly from 146.82 to 148.51. The strong rebound appears to be overdone, and USD is unlikely to rise further. Today, USD is more likely to trade in a range of 147.00/148.50.  Next 1-3 weeks: After USD plummeted to 146.65 two days ago, we indicated yesterday (30 Nov, spot at 147.10) that “downward momentum is building rapidly, and USD is likely to continue to weaken.” Our view was proven wrong quickly as it rebounded strongly and took out our ‘strong resistance’ at 148.40 (high of 148.51). The momentum buildup has faded. For the time being, USD is likely to trade in a range between 146.65 and 149.30 before heading lower at a later stage. 

CME Group’s flash data for crude oil futures markets noted traders added around 65.2K contracts to their open interest positions on Thursday.

CME Group’s flash data for crude oil futures markets noted traders added around 65.2K contracts to their open interest positions on Thursday. In the same line, volume resumed the uptrend and increased by around 664.2K contracts, the largest single-day build since April 3. WTI: A drop to $72.00 appears in store Prices of WTI retreated markedly on Thursday on the back of increasing open interest and volume. Against that, further losses appear likely in the very near term and face the immediate target at the November low of $72.22 per barrel (November 16).

AUD/USD is now predicted to navigate within the 0.6530-0.6665 range in the next few weeks, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

AUD/USD is now predicted to navigate within the 0.6530-0.6665 range in the next few weeks, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: Yesterday, we expected AUD to trade in a range between 0.6595 and 0.6650. However, after rising to a high of 0.6650, AUD dropped sharply to 0.6571 before rebounding. The price action did not result in any increase in downward momentum. We continue to expect AUD to trade in a range, albeit a lower one of 0.6565/0.6640.  Next 1-3 weeks: We have held a positive view in AUD since the middle of last month (see annotations in the chart below). Yesterday (30 Nov, spot at 0.6625), we indicated that AUD must break and stay above 0.6680 soon, or the chance for it to rise further will diminish rapidly. AUD then dropped and broke below our ‘strong support’ level at 0.6575 (low has been 0.6571). The breach of our ‘strong support’ indicates that AUD strength has ended. From here, AUD is likely to trade in a range, probably between 0.6530 and 0.6665. 

With the FX market set to remain highly sensitive to any activity data point, US ISM manufacturing for November will take centre stage today.

With the FX market set to remain highly sensitive to any activity data point, US ISM manufacturing for November will take centre stage today. Economists at ING analyze USD outlook. USD reconnecting with its rate advantage ISM manufacturing for November will be in focus today. The FX market is set to remain highly sensitive to any activity data point, but there is a sense Dollar bulls have survived the consumer spending and PCE risk, so that today’s ISM figures may not have a big impact – barring any big surprises. Incidentally, the notion that the manufacturing sector is in contraction is well established by now. We expect some Dollar consolidation in the coming days, with still upside risks as the USD reconnects with its rate advantage.  

Italy Gross Domestic Product (YoY) registered at 0.1% above expectations (0%) in 3Q

Italy Gross Domestic Product (QoQ) came in at 0.1%, above expectations (0%) in 3Q

Greece S&P Global Manufacturing PMI rose from previous 50.8 to 50.9 in November

Eurozone HCOB Manufacturing PMI came in at 44.2, above expectations (43.8) in November

USD/CAD extends its losses for the second successive day, trading lower around 1.3530 during the European session on Friday.

USD/CAD could extend its losses toward the 1.3500 psychological support level.Technical indicators suggest bearish momentum in the pair.A break above the 1.3550 could reach the seven-day EMA at 1.3596.USD/CAD extends its losses for the second successive day, trading lower around 1.3530 during the European session on Friday. The weakened US Dollar (USD) exerts pressure and undermines the pair. Furthermore, the rebound in WTI prices could provide support to the Canadian Dollar (CAD), consequently putting downward pressure on the USD/CAD pair. The technical indicators for the USD/CAD pair support the current downward trend. The Moving Average Convergence Divergence (MACD) line is below the centerline and shows the divergence below the signal line, indicating a bearish momentum in the USD/CAD pair. Furthermore, the 14-day Relative Strength Index (RSI) below 50 indicates a dovish sentiment, indicating that the USD/CAD pair could meet the support around the psychological level around 1.3500, followed by the next support at 1.3450 level. On the upside, the major level at 1.3550 could act as a key barrier following the seven-day Exponential Moving Average (EMA) at 1.3596 lined up with the psychological level at 1.3600. A decisive breakthrough above the latter could open the doors for the USD/CAD pair to explore the barrier around 23.6% Fibonacci retracement at 1.3621. A resurgence in the US Dollar (USD) could motivate the bulls in the USD/CAD pair to target the significant level at 1.3650, with the possibility of reaching the weekly high at 1.3661 if it successfully surpasses the mentioned resistance. USD/CAD: Daily Chart  

Germany HCOB Manufacturing PMI above forecasts (42.3) in November: Actual (42.6)

The Euro (EUR) manages to regain some balance against the US Dollar (USD) at the end of the week, prompting EUR/USD to revisit the area just beyond 1.0900 the figure.

The Euro regains some composure against the US Dollar.European stocks open Friday’s session with generalized gains.Final PMIs, US ISM Manufacturing, Powell, Lagarde next on tap.The Euro (EUR) manages to regain some balance against the US Dollar (USD) at the end of the week, prompting EUR/USD to revisit the area just beyond 1.0900 the figure. On the flip side, the Greenback gives away part of the recent tw0-day recovery and recedes to the 103.40 zone when gauged by the USD Index (DXY) against the backdrop of the broad-based absence of direction in US yields across different timeframes.   The current monetary policy stance remains steady, as investors take into account the possibility of future interest rate cuts by both the Federal Reserve (Fed) and the European Central Bank (ECB) in the spring of 2024. In the domestic calendar, final Manufacturing PMI in Germany and the Eurozone for the month of November are due ahead of speeches by ECB’s Andrea Enria, Frank Elderson and President Christine Lagarde. In the US, the ISM Manufacturing takes centre stage seconded by Construction Spending and the final S&P Global Manufacturing PMI for the month of November. Daily digest market movers: Euro digests the recent sell-off around 1.0900 The EUR looks directionless against the USD. US and German yields trade in a mixed note so far. Investors expect the Fed to start cutting its rates in the spring of 2024. Markets lean towards a protracted impasse of the ECB until Q2 2024. Chinese Caixin Manufacturing PMI rose past 50 in November. Lagarde will speak later in the session. Chair Powell will participate in a roundtable discussion. Technical Analysis: Euro’s outlook remains positive above 200-day SMA   EUR/USD alternates gains with losses in the sub-1.0900 region following Thursday’s pronounced pullback. Extra losses could prompt EUR/USD to initially confront the key 200-day SMA at 1.0817, while the 55-day SMA at 1.0679 should provide further temporary contention. The loss of the latter exposes the weekly low of 1.0495 (October 13) ahead of the 2023 low of 1.0448 (October 3) and the round level of 1.0400. Occasional bullish attempts should meet immediate hurdle at the November top of 1.1017 (November 29) seconded by the August peak of 1.1064 (August 10) and another weekly high of 1.1149 (July 27), all preceding the 2023 top of 1.1275 (July 18). Meanwhile, the pair is seen maintaining its constructive outlook while above the 200-day SMA. Euro FAQs What is the Euro? The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

France HCOB Manufacturing PMI came in at 42.9, above expectations (42.6) in November

Italy HCOB Manufacturing PMI came in at 44.4 below forecasts (45.3) in November

USD/CAD hovers around the mid-1.35s. Economists at ING analyze the pair’s outlook.

USD/CAD hovers around the mid-1.35s. Economists at ING analyze the pair’s outlook. Pressure on the BoC to soften its hawkish bias is mounting We doubt Canadian unemployment is bound for a sharp rise in the near term, but the pressure on the BoC to soften its hawkish bias is mounting anyway. Our call is for 150 bps of cuts in Canada next year, but the near term outlook for the Loonie remains strictly tied to US data, with which it is highly correlated.  We feel 1.35-1.37 is the range for USD/CAD into year-end. See – Canada Employment Preview: Forecasts from five major banks, jobless rate ticking higher  

Silver (XAG/USD) retreats from the vicinity of mid-$25.00s, or a near seven-month peak touched this Friday and refreshes daily low during the early part of the European session.

Silver pulls back after hitting a near seven-month high earlier this Friday.The technical setup favours bulls and supports prospects for further gains.A slightly overbought RSI is seen as the only factor acting as a headwind.Silver (XAG/USD) retreats from the vicinity of mid-$25.00s, or a near seven-month peak touched this Friday and refreshes daily low during the early part of the European session. The white metal, however, manages to hold above the $25.00 psychological mark and seems poised to prolong its well-established upward trajectory witnessed over the past three weeks or so. The recent breakout through a technically significant 200-day Simple Moving Average (SMA), a multi-month-old descending trend line and the overnight close above the $25.00 mark validates the near-term positive outlook for the XAG/USD. That said, the Relative Strength Index (RSI) on the daily chart is flashing slightly overbought conditions and holding back bulls from placing fresh bets. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further gains. From current levels, weakness below the $25.00 round figure is likely to find some support near the $24.75-$24.70 region. Any further pullback could be seen as a buying opportunity near the $24.20-$24.15 region and is likely to remain limited near the descending trend-line resistance breakpoint, around the $24.00 mark. The latter should act as a pivotal point, which if broken might prompt some technical selling and pave the way for a deeper corrective decline, towards retesting the 200-day SMA, near the $23.40-$23.35 area. On the flip side, the multi-month peak, around the $25.45-$25.50 region, might now act as an immediate hurdle, above which the XAG/USD could accelerate the momentum towards reclaiming the $26.00 mark. Some follow-through buying beyond the YTD peak, around the $26.15 area touched in May, will be seen as a fresh trigger for bullish traders. The subsequent move-up has the potential to lift the white metal to the $27.00 neighbourhood, or the March 2022 yearly swing high. Silver daily chart Technical levels to watch  

Switzerland SVME - Purchasing Managers' Index registered at 42.1 above expectations (42) in November

The US Dollar bounced into month end, but the NZD has held up.

The US Dollar bounced into month end, but the NZD has held up. Economists at ANZ Bank analyze Kiwi’s outlook. Relative stability in NZD/USD Kiwi outperformed peers as the USD corrected higher, spurred on by higher US bond yields and month-end wrangling. That has resulted in relative stability for NZD/USD. With interest rate markets now completely ignoring the RBNZ and instead latching on to the global vibe (despite there being clear differences, which the RBNZ has pointed out), higher local rates aren’t current support for the NZD, but the potential for them to rise (or not fall as fast as US rates) could be a powerful ally over coming weeks if the Fed is dovish and if US yields keep falling.  

USD/MXN snaps a two-day winning streak on the back of the weaker Greenback amid downbeat US Treasury yields, trading around 17.30 during the European session on Friday.

USD/MXN faces challenges to the subdued sentiment around the Fed’s rate trajectory.The likelihood of ending the Fed’s rate hikes puts pressure on the US bond yields.Mexico’s Jobless Rate eased to 2.7% from 2.9% prior.Banxico anticipated inflation to reach its 3.0% target by 2025.USD/MXN snaps a two-day winning streak on the back of the weaker Greenback amid downbeat US Treasury yields, trading around 17.30 during the European session on Friday. The likelihood of ending the interest rate hike by the Federal Reserve drags the US yields downward. Furthermore, the US Dollar (USD) might have found support in recent US data. The US Core Personal Consumption Expenditures Price Index (PCE) showed a month-on-month easing to 3.5% in October, a decrease from the previous reading of 3.7%. In the labor market, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the anticipated 220K. These indicators provide insights into inflation trends and the labor market's health in the United States (US). Mexico's economic updates include a lower-than-expected Jobless Rate at 2.7% YoY, below forecasts of 2.8% and September’s 2.9%. Additionally, the Fiscal Balance for October witnessed a significant decline in the fiscal deficit, dropping to 29.58B from the previous 132.56B. In its quarterly report released on Wednesday, the Bank of Mexico (Banxico) revised its economic growth forecasts upward for 2023 and 2024. The bank anticipates that inflation will take longer to reach its target, projecting a 3.0% target by 2025. Governor Victoria Rodriguez Ceja has left the possibility of rate cuts open, with discussions expected in the first quarter of 2024. The impending release of the US ISM Manufacturing PMI for November and the scheduled speech by US Federal Reserve (Fed) Chairman Jerome Powell on Friday hold substantial importance for market dynamics. Investors will closely monitor these events, as they have the potential to play a crucial role in determining the path of the USD/MXN pair.  

Spain HCOB Manufacturing PMI came in at 46.3, above forecasts (45.5) in November

Austria Gross Domestic Product (QoQ) above expectations (-0.6%) in 3Q: Actual (-0.5%)

Switzerland Gross Domestic Product (QoQ) came in at 0.3%, above expectations (0.1%) in 3Q

Switzerland Gross Domestic Product (YoY) came in at 0.3%, below expectations (0.5%) in 3Q

The Euro came under considerable pressure after Thursday's November inflation data.

The Euro came under considerable pressure after Thursday's November inflation data. Economists at Commerzbank analyze EUR outlook. How quick or slow will the ECB be this time? If the inflation shock is actually ‘through’ worldwide, there should be interest rate cuts in several currency areas. But this should not actually be bad news for the Euro. The ECB's interest rate policy is typically rather slow and cautious. Such a monetary policy style in a phase of general interest rate cuts should have an equally EUR-positive effect if the ECB central bankers follow their G10 colleagues (especially the Fed) with some delay in the coming year – this time in the direction of lower interest rates. On the whole, the coming monetary policy phase should therefore be rather favorable for EUR exchange rates. However, the market sees things differently. It has already fully priced in the first ECB interest rate cut for next April, while it is not pricing in the first Fed rate cut until next summer (at least not with a high degree of confidence).   

France Budget Balance rose from previous €-186.12B to €-177.71B in October

France Budget Balance: €-177.706B (October) vs €-186.12B

Open interest in gold futures markets dropped by nearly 8.7K contracts after two consecutive daily builds on Thursday, according to preliminary readings from CME Group.

Open interest in gold futures markets dropped by nearly 8.7K contracts after two consecutive daily builds on Thursday, according to preliminary readings from CME Group. Volume followed suit and shrank for the third straight session, now by almost 65K contracts. Gold: Next on the upside comes $2070 Thursday’s knee-jerk in gold prices was on the back of shrinking open interest and volume, hinting at the idea that further losses appear not favoured in the very near term and leaving the door open to the continuation of the ongoing uptrend. That said, the next target on the upside emerges at the 2023 top of $2067 per troy ounce (May 4).

Sweden Purchasing Managers Index Manufacturing (MoM) increased to 49 in November from previous 45.7

Economists at Commerzbank retain their USD/TRY forecast of 35.00 by the end of 2024.

Economists at Commerzbank retain their USD/TRY forecast of 35.00 by the end of 2024. Credibility is a long, arduous process The Turkish Lira has stabilised to some degree after the newly appointed economy management team continued to implement tough monetary tightening and financial sector reforms. Still, it will take much longer for inflation to return fully to target, hence the market remains uncertain about President Tayyip Erdogan’s support. We retain a ‘symbolic forecast’ for the USD/TRY pair to rise to 35.00 by end-2024.  

NZD/USD trims its intraday gains, still trading higher near 0.6160 during the Asian session on Friday.

NZD/USD experiences pressure despite upbeat data from New Zealand.Kiwi Consumer Confidence improved to 91.9 in November from 88.1 prior.RBNZ Deputy Governor Christian Hawkesby said on Friday, “High and sticky core inflation leaves little room for error.”China's Caixin Manufacturing PMI rose to 50.7 and defied the anticipated decline to 49.8.NZD/USD trims its intraday gains, still trading higher near 0.6160 during the Asian session on Friday. The NZD/USD pair received upward support as the US Dollar (USD) drifted lower on the back of subdued US bond yields. Additionally, New Zealand’s Roy Morgan Consumer Confidence released for November by the ANZ, showed that consumer confidence improved to 91.9 from 88.1 prior. The improved data could have supported the Kiwi pair’s strength. Furthermore, the little hawkish remarks, from the Reserve Bank of New Zealand (RBNZ) Deputy Governor Christian Hawkesby, could provide support for the New Zealand Dollar (NZD). Hawkesby said on Friday, “High and sticky core inflation leaves little room for error.” Deputy Governor Hawkesby also concerned that certain measures of inflation expectations have shown an increase. New Zealand could benefit from a period of restrained spending. The majority of borrowers are currently able to manage their debt at the current interest rate levels. In November, China's Caixin Manufacturing PMI surpassed expectations, rising to 50.7 and defying the anticipated decline to 49.8 from the previous reading of 49.5. This unexpected positive turn in the data has the potential to offer support and strengthen the Kiwi Dollar, considering the economic dynamics between China and New Zealand. The US Dollar Index (DXY) faces a challenge as the US Bond yields react subdued, countering recent gains. The mixed US data might have helped the Greenback to gain ground. The US Core Personal Consumption Expenditures Price Index (PCE) displayed a MoM easing to 3.5% in October, down from the previous reading of 3.7%. In the labor market, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the expected 220K. These indicators provide insights into inflation trends and the labor market's health, influencing economic assessments and potential policy decisions. The upcoming release of the US ISM Manufacturing PMI for November and the speech by US Federal Reserve (Fed) Chairman Jerome Powell on Friday are events that can significantly influence market dynamics. Investors will be keenly observing these developments as they can play a pivotal role in shaping the trajectory of the US Dollar. Powell's remarks, in particular, may provide insights into the Fed's stance on monetary policy and its outlook on the economic landscape.  

Here is what you need to know on Friday, December 1: Risk sentiment remains tepid on Friday, as Asian stocks traded mostly lower, despite the Wall Street rally overnight.

Here is what you need to know on Friday, December 1:Risk sentiment remains tepid on Friday, as Asian stocks traded mostly lower, despite the Wall Street rally overnight. China’s Caixin Manufacturing PMI unexpectedly expanded to 50.7 in November but failed to impress markets, as factory activity in other key regions of Asia remained sluggish on weak global demand. The US S&P 500 futures stay muted, as investors weigh the US Federal Reserve (Fed) interest rate cut expectations. Thursday’s US Core Personal Consumption Expenditures (PCE) Price index rose at an annual pace of 3.0% in October, cooling off from a three-month run of 3.4% readings. On a monthly basis, the Core PCE inflation showed no growth in the reported month, missing a forecast of a 0.1% increase while down from the 0.4% print registered in September. New York Fed Bank President John Williams said on Thursday, “in balancing the risks of too-high inflation and a weaker economy, and based on what I know now, my assessment is that we are at, or near, the peak level of the target range of the federal funds rate.” Falling inflation in the US strengthened dovish Fed expectations while the dovish commentary from Fed officials also played its part. The US Dollar has returned to the red zone alongside the US Treasury bond yields, snapping the previous rebound fuelled by the end-of-the-month short covering. Markets continue to price a 48% chance of a rate cut in March next year compared with a 22% chance last week, the CME Group’s FedWatch tool showed on Friday. At the time of writing, the US Dollar Index is holding the lower ground near 103.30, consolidating the weekly losses while the benchmark 10-year US Treasury bond yields are licking their wounds near 4.33%. US Dollar price today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Euro.  USDEURGBPCADAUDJPYNZDCHFUSD  -0.12% -0.05% -0.08% 0.03% 0.11% 0.03% -0.05%EUR0.12%   0.05% 0.03% 0.14% 0.21% 0.14% 0.07%GBP0.05% -0.06%   -0.03% 0.09% 0.16% 0.08% 0.01%CAD0.09% -0.02% 0.04%   0.12% 0.19% 0.11% 0.05%AUD-0.03% -0.15% -0.09% -0.11%   0.07% 0.00% -0.08%JPY-0.11% -0.19% -0.17% -0.20% -0.05%   -0.06% -0.14%NZD-0.03% -0.14% -0.08% -0.11% 0.00% 0.08%   -0.08%CHF0.04% -0.07% -0.01% -0.04% 0.08% 0.15% 0.07%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). All eyes now remain on Fed Chair Jerome Powell’s dual appearance later in American trading. Powell is due to speak at 16 GMT and 19 GMT at two separate events organized by Spelman College in Georgia. His words will be closely scrutinized for fresh hints on the Bank’s path forward on interest rates. It will be Powell’s last public appearance before the December 12-13 policy meeting. The Fed enters its ‘blackout period’ on Saturday. Besides, the US ISM Manufacturing PMI data will be also published in the US session, providing fresh US Dollar valuations. Most major currencies are supported by the renewed US Dollar weakness. The Euro (EUR) seems to be the strongest heading to the European opening bells. EUR/USD is holding its recovery momentum above 1.0900, having hit fresh six-day lows at 1.0879 on Wednesday after European Central Bank’s (ECB) interest rate cut bets ramped on softer Euro area inflation data. Traders will look forward to the final Eurozone Manufacturing PMI later in the day ahead of ECB President Christine Lagarde’s speech.GBP/USD is rebounding toward 1.2650, finding a floor amid hawkish BoE commentary. BoE’s hawkish dissenter, Megan Greene, said on Thursday, “…the policy may have to be restrictive for an extended period of time in order return inflation to 2% over the medium term.” The UK S&P Global final Manufacturing PMI data is awaited but is unlikely to have any impact on the Pound Sterling. Antipodeans fail to find any inspiration from strong Chinese Caixin PMI data and a broadly weaker US Dollar, as a cautious market mood underwhelms. AUD/USD is challenging the 0.6600 level, reversing an early advance to 0.6630 while NZD/USD is flattish near 0.6150. The Japanese Yen is partly reversing its weekly gain against the US Dollar, as USD/JPY is back above 148.00. USD/CAD is licking its wounds near 1.3550, awaiting the top-tier Canadian employment data.WTI is recovering ground to near $76 after the OPEC+ decision disappointment.  Saudi Arabia, Russia and other members of OPEC+ agreed to voluntary output cuts for the first quarter of 2024. However, Angola rejected a new output quota handed to it by the alliance.  Gold price is heading back toward $2,050, underpinned by dovish Fed expectations.

United Kingdom Nationwide Housing Prices n.s.a (YoY) came in at -2%, above forecasts (-2.3%) in November

United Kingdom Nationwide Housing Prices s.a (MoM) registered at 0.2% above expectations (-0.4%) in November

Canada will release the Labor Force Survey on Friday. The Statistics Canada report is expected to show that the Unemployment Rate increased to 5.8% in November from 5.7% in the previous month.

Unemployment Rate in Canada expected to tick higher, foreseen at 5.8% in November.Tepid job creation could help the Bank of Canada to hold the policy rate steady. USD/CAD could plunge with softer-than-expected employment figures. Canada will release the Labor Force Survey on Friday. The Statistics Canada report is expected to show that the Unemployment Rate increased to 5.8% in November from 5.7% in the previous month. At the same time, the Net Change in Employment, which is the number of new jobs created throughout the month, is foreseen at 15,000, after the country added just 17,500 new job positions in October. The Bank of Canada (BoC)  decided to leave the benchmark interest rate unchanged at 5% in its October meeting, with policymakers claiming they want to allow monetary policy to cool the economy and relieve price pressure, despite noting inflationary risk increased since their July meeting. Employment-related data is critical for the BoC, as a too-tight labor market may push inflation up. The Canadian Dollar (CAD) usually strengthens with a better-than-anticipated report, yet an upbeat outcome could also mean more rate hikes in the near future.  How can the unemployment report affect the Bank of Canada policy? The BoC engaged in massive rate hikes as inflation soared to multi-decade highs in mid-2022 as a result of the post-pandemic reopening. Central banks from around the world lived a similar experience, with all of them juggling to tame inflation without triggering a steep economic setback. Price pressures indeed eased from their peaks but at a slower-than-anticipated pace. One of the main factors maintaining inflation high comes from the employment sector, as a solid pace of job creation leads to increased spending. Higher demand tends to push prices up. In a high-inflationary context, central banks tend to welcome higher Unemployment Rate levels, even at the risk of an economic slowdown. Through the past year and a half, policymakers prioritized taming inflation over avoiding a recession. But that changed a few months ago, with central banks adopting a more cautious stance, arguing that monetary policy tightening needs time to unfold. The non-spoken reason is that further tightening will sink economic growth.  The Bank of Canada is not oblivious to this scenario. High rates are affecting households and businesses, and despite inflation remaining above the central bank’s target of around 2%, policymakers can not add more pressure.  Speculative interest started betting on the end of monetary tightening in mid-2023 as central banks started spacing rate hikes, reducing the number of basis points of each rate increase and finally pausing. Worldwide, policymakers made it clear that additional hikes remain on the table, particularly if inflation resumes its upward route, but markets do not believe so. "This tightening of monetary policy is working, and interest rates may now be restrictive enough to get us back to price stability," BoC Governor Tiff Macklem said in a statement last week. However, he also warned that it is too early to think about potential rate cuts. Still, financial markets are now betting on potential dates for rate cuts, against policymakers' warnings.  With that in mind, a higher-than-anticipated Unemployment Rate and a tepid Net Change in Employment will be seen as a confirmation of no more rate hikes, and push the CAD higher.  When is November’s Canada Unemployment Rate released and how could it affect USD/CAD? The Canadian Unemployment Rate for November will be released with the publication of the Labor Force Survey on Friday at 13:30 GMT. Ahead of the release, market forecasts point to a soft report. The Unemployment Rate is expected to have increased to 5.8% from 5.7% in October, while the Net Change in Employment is expected at 15,000.  As said, tepid figures usually weigh on the CAD, which means USD/CAD should move north. But with the focus on central banks’ future decisions, softer-than-anticipated figures will likely lift hopes about the end of monetary tightening, and end up boosting the CAD against its American rival.  The US Dollar has been under steady selling pressure since the United States (US) Federal Reserve (Fed) decided to keep interest rates unchanged for two meetings in a row. USD/CAD peaked at 1.3898 on November 1, and trades at around the 1.3560 level ahead of the employment-report release.  Valeria Bednarik, chief analyst at FXStreet, said: “Bets against the US Dollar seem a bit overdue, and USD/CAD recovered from a multi-week low of 1.3540 posted on Wednesday, resuming its decline on the back of softer-than-anticipated US inflation figures. Looking at the Canadian monthly employment survey, it is worth noting that the market is trading on sentiment, rather than on economic health. A solid report could initially trigger CAD’s strength, but market participants could quickly change their minds, and bet against the CAD on hopes the BoC will refrain from hiking further.” When it comes to technical levels, Bednarik adds: “Measuring the latest decline between 1.3765 and 1.3540, the 38.2% Fibonacci retracement comes at 1.3626, the immediate resistance level. Steady gains above it expose the next relevant Fibonacci resistance, the 61.8% retracement at 1.3680. Gains beyond the latter seem unlikely amid broad US Dollar weakness. Should the pair turn south, support could be found in the low at 1.3540, while below the latter, 1.3470 comes into sight.”   Employment FAQs How do employment levels affect currencies? Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages. Why is wage growth important? The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy. How much do central banks care about employment? The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation. Economic Indicator Canada Unemployment Rate The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish. Read more.Next release: 12/01/2023 13:30:00 GMTFrequency: MonthlySource: Statistics Canada

A drop below 1.2600 could expose a deeper retracement in GBP/USD in the near term, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

A drop below 1.2600 could expose a deeper retracement in GBP/USD in the near term, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: We expected GBP to trade in a range of 1.2655/1.2720 yesterday. However, after rising to a high of 1.2710, GBP dropped to a low of 1.2604. Despite the decline, there is no clear increase in downward momentum. Today, we continue to expect GBP to trade in a range, likely between 1.2600 and 1.2690.  Next 1-3 weeks: Yesterday (30 Nov, spot at 1.2695), we noted that despite GBP rising to a high of 1.2733 on Wednesday, “upward momentum has not increased much.” However, we were of the view that “there is room for it to advance to 1.2745 before the risk of a pullback increases.” We did not anticipate GBP to drop to a low of 1.2604. The low was just a few pips above our ‘strong support’ level of 1.2600. Upward momentum is beginning to wane. In order to revive the flagging momentum, GBP must break and stay above 1.2690 in the next couple of days. Otherwise, a breach of 1.2600 will not be surprising and would mean that GBP is likely to pullback in the coming days. 

Most Asian stocks edge lower on Friday amid the cautious mood in the market, despite the growing expectations that the Federal Reserve (Fed) and European Central Bank (ECB) are likely to cut rates, beginning in the middle of 2024.

Asian equities trade in negative territory on Friday.India's Nifty 50 reached an all-time high on Friday following stronger-than-expected GDP Q2 growth numbers.Chinese Caixin Manufacturing PMI arrived at 50.7 in November vs. 49.5 prior, better than expected.Investors await the US ISM Manufacturing PMI data and Fed Chair Jerome Powell’s speech later on Friday.Most Asian stocks edge lower on Friday amid the cautious mood in the market, despite the growing expectations that the Federal Reserve (Fed) and European Central Bank (ECB) are likely to cut rates, beginning in the middle of 2024. At press time, China’s Shanghai was up 0.02% to 3,031, the Shenzhen Component Index declined 0.04% to 9,734, Hong Kong’s Hang Sang dropped 0.24% to 17,001, South Korea’s Kospi dropped 1.01%, Japan’s Nikkei was down 0.17% and India’s NIFTY 50 climbed 0.72% to 20,276, about 5 points away from its all-time high

India's Nifty 50 set a new high on Friday following stronger-than-expected economic growth in the September quarter, which fueled confidence about the Indian economic outlook. That being said, the Indian economy expanded 7.6% in the July–September quarter of the current fiscal year, marking the world’s fastest-growing major economy. In China, mixed economic signals also kept optimism in check. Early Friday, the Chinese Caixin Manufacturing PMI came in at 50.7 in November from the previous reading of 49.5, above the market consensus of 49.8. However, the NBS PMI on Thursday showed persistent weakness in manufacturing activity and services sectors.

Apart from this, Japan's manufacturing activity contracted at the fastest pace in nine months, while South Korea's factory activity remained stable.

Looking ahead, investors await the US ISM Manufacturing PMI data. The November figure is estimated to climb to 47.6 from 46.7. Market players will take more cues from the Fed Chair Jerome Powell and the Fed's Goolsbee about further monetary policy and interest rate paths. Next week, attention will shift to the Reserve Bank of Australia (RBA) meeting, which is widely expected to keep interest rates on hold.  

The greenback, in terms of the USD Index (DXY), looks for direction around the 103.30 zone at the end of the week.

The index alternates gains with losses around 103.30.Fed’s J. Powell will participate in a roundtable discussion.ISM Manufacturing, Construction Spending take centre stage.The greenback, in terms of the USD Index (DXY), looks for direction around the 103.30 zone at the end of the week. USD Index looks at Powell, key data Following a two-day recovery, the index now trades in a cautious tone in light of the publication of key data releases and the speech by Chief Powell due later in the NA session. In the meantime, speculation of interest rate cuts by the Federal Reserve at some point in the spring of 2024 remains on the rise despite some contrasting opinions from Fed policymakers. In the US data space, the always-relevant ISM Manufacturing is due along with Construction Spending and the final S&P Global Manufacturing PMI for the month of November. In addition, Chicago Fed A. Goolsbee (voter, centrist) is also due to speak. What to look for around USD The index managed to regain some balance after bottoming out in three-week lows near 102.40 earlier in the week. Looking at the broader picture, the dollar appears depressed against the backdrop of rising speculation of probable interest rate cuts in H1 2024, all in response to further disinflationary pressures and the gradual cooling of the labour market. Some support for the greenback, however, still emerges the resilience of the US economy as well as a persistent hawkish narrative from some Fed rate setters.Key events in the US this week: Final S&P Global Manufacturing PMI, ISM Manufacturing PMI, Construction Spending, Fed’s Powell (Friday).Eminent issues on the back boiler: Growing perception of a soft landing for the US economy. Speculation of rate cuts at some point in the spring of 2024. Omnipresent geopolitical effervescence vs. Russia and China. Potential spread of the Middle East crisis to other regions. USD Index relevant levels Now, the index is down 0.18% at 103.33 and faces immediate contention at 102.46 (monthly low November 29) ahead of 101.74 (monthly low August 4) and then 100.51 (weekly low July 27). On the upside, the breakout of 103.58 (200-day SMA) would open the door to 104.21 (weekly high November 22) and then 105.44 (55-day SMA).

In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, EUR/USD could retreat to the 1.0810 region in the short-term horizon.

In the view of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, EUR/USD could retreat to the 1.0810 region in the short-term horizon. Key Quotes 24-hour view: We highlighted yesterday that “overbought conditions, combined with slowing momentum, suggest EUR is likely to continue to trade sideways.” Our view was incorrect as EUR plummeted to a low of 1.0877 before ending the day on a weak note at 1.0886 (-0.75%). While the sharp decline appears to be running ahead of itself, there is scope for EUR to dip to 1.0865 before a recovery can be expected. The major support at 1.0810 is highly unlikely to come under threat. Resistance is at 1.0915, followed by 1.0940.  Next 1-3 weeks: Two days ago, EUR rose to a 3-1/2-month high of 1.1017. Yesterday (30 Nov, spot at 1.0975), we indicated that despite the advance, upward momentum has not increased by much. We added, “While the bias for EUR is on the upside, it remains to be seen if it has enough momentum to break clearly above the major resistance at 1.1065.” In London trade, EUR fell sharply and broke below our ‘strong support’ level of 1.0925. Upward momentum has faded, and downward momentum has increased a tad. From here, EUR could edge lower towards 1.0810. At this time, the chance of EUR breaking clearly below 1.0810 is not high. On the upside, if EUR breaks above 1.0985, it would indicate that it is likely to trade in a range instead of edging lower towards 1.0810. 

Russia S&P Global Manufacturing PMI remains unchanged at 53.8 in November

Netherlands, The Markit Manufacturing PMI: 44.9 (November) vs 43.8

The EUR/USD pair finds some support near 1.0880 and then rebounds above the 1.0900 mark during the early European session on Friday.

EUR/USD snaps the two-day losing streak, adding 0.20% for the day.The Relative Strength Index (RSI) stands below the 50.0 midline, indicating that further downside cannot be ruled out.The immediate resistance level is seen at 1.0935; the key support level is located at the 1.0870-1.0880 zone.The EUR/USD pair finds some support near 1.0880 and then rebounds above the 1.0900 mark during the early European session on Friday. The recovery of the pair is bolstered by the softer US Dollar (USD) despite Eurozone inflation coming in worse than market expectations. The major currently trades around 1.0907, up 0.20% on the day.

The Harmonized Index of Consumer Prices (HICP), which measures inflation in the Eurozone, has raised expectations among investors that the European Central Bank (ECB) might start cutting its deposit rate as early as next April. Nonetheless, ECB President Christine Lagarde emphasized this week that now is not the time to declare victory since wage pressures remain high.

According to the four-hour chart, EUR/USD maintains a bullish outlook as the major pair holds above the key 100-hour Exponential Moving Averages (EMA) with an upward slope. However, the Relative Strength Index (RSI) stands below the 50.0 midline, indicating that further downside cannot be ruled out for the time being.

On the upside, the immediate resistance level for EUR/USD is seen near a low of November 28 at 1.0935. The next hurdle to watch is a high of November 21 at 1.0965. Any follow-through buying above the latter will see the rally to the key upside barrier at the 1.1015–1.1025 region, portraying the confluence of the Bollinger Band and a high of November 29.

On the flip side, the critical support level is located at the 1.0870–1.0880 zone. The mentioned level is the congestion of the 100-hour EMA and the lower limit of the Bollinger Band. The additional downside filter to watch is a low of November at 1.0852, followed by a low of November 17 at 1.0825, and finally a high of November 6 at 1.0755.EUR/USD four-hour chart

 

Australia RBA Commodity Index SDR (YoY) up to -10.5% in November from previous -16.8%

USD/CHF hovers near 0.8750 during the Asian session on Friday, retracing its gains registered on Thursday.

USD/CHF consolidates ahead of Swiss GDP data.Swiss Gross Domestic Product is expected to remain consistent at 0.5%.Investors await Fed Chair Jerome Powell’s speech on Friday.USD/CHF hovers near 0.8750 during the Asian session on Friday, retracing its gains registered on Thursday. The decline in the US Dollar (USD) weighs on the USD/CHF pair following the likelihood of ending the interest rate hike by the US Federal Reserve (Fed). Swiss Real Retail Sales on Thursday, declined by 0.1% compared to the expected growth of 0.2% in October. The downbeat Swiss consumer demand might have put pressure on the Swiss Franc (CHF). Moreover, Gross Domestic Product (GDP) data will be eyed on Friday. However, Swiss National Bank (SNB) Chairman Thomas Jordan has acknowledged earlier the possibility of future interest rate hikes, contributing support to underpinning the CHF. The US Dollar Index (DXY) faces a challenge as the US Bond yields react subdued, countering recent gains. The DXY trades lower at 103.30 at the time of writing. The mixed US data might have helped the Greenback to gain ground. Additionally, the US Core Personal Consumption Expenditures Price Index (PCE) showed a YoY easing to 3.5% in October from the previous reading of 3.7%. The YoY Core PCE Price Index saw a decline of 0.2% from the prior 0.3%. Moreover, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the expected 220K. Investors await the release of the US ISM Manufacturing PMI for November, and they also have their eyes on the speech by US Federal Reserve (Fed) Chairman Jerome Powell scheduled for Friday. These events are likely to impact market dynamics and influence the trajectory of the US Dollar.  

West Texas Intermediate (WTI) recovers the recent losses, trading higher around $75.90 per barrel.

WTI price experiences upward support on the subdued Greenback.Crude oil prices faced pressure on softer output cuts.OPEC+ decided to reduce a total of 2.2 million bpd for the first quarter of 2024.Downbeat US bond yields contribute to pressure on the US Dollar.West Texas Intermediate (WTI) recovers the recent losses, trading higher around $75.90 per barrel. Crude oil prices see an improvement, propelled by a weaker US Dollar (USD). However, the WTI price faced losses following the decision of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to implement voluntary output cuts, smaller than expected, for the first quarter of 2024. OPEC announced a total reduction of 2.2 million barrels per day (bpd) from eight producers in a statement following the meeting. This includes the extension of voluntary cuts by Saudi Arabia and Russia, amounting to 1.3 million bpd. The additional 900,000 bpd of cuts pledged on Thursday comprises 200,000 bpd in fuel export reductions from Russia, with the remaining cuts distributed among six other member countries. The pressure on oil markets intensified with the release of weak Purchasing Managers Index (PMI) data from China. Business activity in the world's largest oil importer displayed minimal signs of improvement in November. Although, on Friday, Manufacturing PMI in November showed improvement. China's Caixin Manufacturing PMI surpassed expectations, recording an improvement to 50.7 in November, contrary to the expected decline to 49.8 from the previous reading of 49.5. This unexpected positive turn in the data could potentially offer support and strengthen the Crude oil prices. On Wednesday, the US EIA Crude Oil Stocks Change for the week ending on November 24 reported the barrels of stock at 1.609M against the deficit of 0.933M. On Friday, Baker Hughes US Oil Rig Count will report the number of active rigs.  

Indonesia Core Inflation (YoY) below forecasts (1.9%) in November: Actual (1.87%)

Indonesia Inflation (MoM) came in at 0.38%, above forecasts (0.23%) in November

Gold price (XAU/USD) attracts some dip-buying during the Asian session on Friday and reverses a major part of the previous day's losses.

Gold price regains positive traction on Friday and is underpinned by rising Fed rate cut bets.Growing concerns about a global economic downturn lend additional support to the metal.The risk-on mood might cap gains ahead of the US ISM PMI and Fed Chair Powell’s speech.Gold price (XAU/USD) attracts some dip-buying during the Asian session on Friday and reverses a major part of the previous day's losses. The precious metal currently trades around the $2,040 region, up over 0.15% for the day and well within the striking distance of its highest level since May 5 touched on Wednesday. Data released from the United States (US) on Thursday showed that inflation continued to moderate in October and a slowing labour market, validating the view that the Federal Reserve (Fed) is done raising interest rates. The dovish outlook turns out to be a key factor benefitting the non-yielding yellow metal. Meanwhile, a duo of Fed officials pushed back against expectations for a quick pivot to rate cuts and left the door open to further policy tightening should the progress on inflation stall. This, however, does little to dim the prospects for an imminent shift in the Fed's policy stance and keeps a lid on the recent US Dollar (USD) recovery from its lowest level since August 11. Apart from this, mixed signs on the strength of China's economy and darkening global outlook lend support to the safe-haven Gold price. That said, the recent risk-on rally in the US equity markets might cap the XAU/USD ahead of Fed Chair Jerome Powell's speech. Daily Digest Market Movers: Gold price continues to draw support from dovish Federal Reserve expectations Bets that the Federal Reserve will not hike rates again and may start easing its monetary policy by the first half of 2024 continue to lend some support to the non-yielding Gold price. The CME group's FedWatch Tool indicates an even possibility that the Fed will cut policy rates as early as March 2024 and a near 80% chance of such a move at the May FOMC meeting. The bets were reaffirmed by the key inflation data on Thursday, which showed that the Personal Consumption Expenditures (PCE) Price Index remained unchanged in October. Over the 12 months, the PCE Price Index registered the smallest year-on-year increase since March 2021 and decelerated from 3.4% to 3.0% during the reported month. Moreover, the gauge that strips out volatile food and energy prices rose by a modest 0.2% in October and saw an annual rise of 3.5%, further pointing to signs of easing inflation. Another report showed that Jobless Claims rose to 218K last week and 1.93 million people were collecting unemployment benefits the week that ended November 18 – the most in two years. New York Fed President John Williams said on Thursday that it will be appropriate to maintain a restrictive stance for quite some time to bring inflation back to the 2% target. San Francisco Fed President Mary Daly noted that interest rates are in a very good place to control inflation, though she is not thinking about cuts and that it was too soon to say if hikes are finished. Given the recent mixed signals, the market attention will remain glued to Fed Chair Jerome Powell's speech, which could infuse some volatility and provide a fresh impetus to the XAU/USD. Traders will also confront the release of the US ISM Manufacturing PMI, which is expected to improve to 47.6 in November, though remains in contraction territory for the 12th straight month. Technical Analysis: Gold price seems poised to appreciate further, bulls await a move beyond the multi-month peak From a technical perspective, any subsequent move-up is likely to face some resistance near the $2,052 area, or a multi-month peak. With oscillators on the daily chart holding comfortably in the positive territory, some follow-through buying will be seen as a fresh trigger for bullish traders and allow the Gold price to accelerate the momentum further towards challenging the all-time high, around the $2,079-2,080 zone touched in May. On the flip side, the overnight swing low, around the $2,030 area, could act as immediate support ahead of the $2,020 zone and the $2,010-$2,008 strong horizontal resistance breakpoint. The latter should act as a key pivotal point, which if broken might prompt some technical selling and drag the Gold price further below the $2,000 psychological mark, towards testing the next relevant support near the $1,990 region. US Dollar price today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Canadian Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  -0.07% -0.04% -0.10% 0.04% 0.06% -0.07% 0.02%EUR0.07%   0.02% -0.04% 0.10% 0.13% 0.00% 0.09%GBP0.03% -0.03%   -0.07% 0.07% 0.11% -0.03% 0.06%CAD0.10% 0.04% 0.07%   0.14% 0.17% 0.04% 0.14%AUD-0.04% -0.10% -0.07% -0.13%   0.03% -0.10% -0.01%JPY-0.06% -0.10% -0.11% -0.19% 0.01%   -0.12% -0.04%NZD0.06% -0.01% 0.02% -0.04% 0.09% 0.13%   0.09%CHF-0.03% -0.10% -0.06% -0.13% 0.01% 0.05% -0.09%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Indian Rupee (INR) gathers strength on Friday, bolstered by the stronger-than-expected India’s growth number.

Indian Rupee gains momentum on the upbeat Indian growth number.India’s GDP expanded by 7.6% for the Q2 of this fiscal year, making it the fastest-growing major economy.Investors will closely watch the US ISM Manufacturing PMI and Fed Chair Jerome Powell’s speech later on Friday.Indian Rupee (INR) gathers strength on Friday, bolstered by the stronger-than-expected India’s growth number. The country’s GDP expanded 7.6% in the September quarter of this fiscal year and remained the fastest-growing major economy, according to the statistics ministry on Thursday. The expansion in the Indian economy was boosted by government spending and robust performance in the manufacturing, mining, and construction sectors. This reading came in better than the projections of 6.5% by the Reserve Bank of India (RBI). Despite inflation falling to a four-month low of 4.87% in October, it is expected to remain above the RBI's 4% target for the next two years. The markets anticipate the RBI to remain hawkish in its upcoming policy and will keep its key interest rate unchanged at 6.50% for a fifth consecutive meeting.

Market players will focus on the US ISM Manufacturing PMI for November, due on Friday. The figure is expected to grow to 47.6 from 46.7. Furthermore, Fed Chair Jerome Powell is set to speak. Market anticipation has become more aggressive regarding Fed policy easing, with Fed funds futures now pricing five quarter-percentage-point rate cuts next year, according to the CME Group.Daily Digest Market Movers: Indian Rupee trades on the front foot despite multiple global headwindsThe Indian economy grew 7.6% in the July–September quarter of the current fiscal year 2023-24, remaining the world’s fastest-growing major economy. India's fiscal deficit from April to October was 8.04 trillion Indian Rupees or 45% of the estimate for the whole year. Indian Prime Minister Narendra Modi said on Thursday that the GDP growth data for the second quarter of the current fiscal year demonstrated the Indian economy's resilience and strength in the face of global challenges. Domestic demand in India continues to be the primary driver of economic activity, as external demand remains fragile. The Reserve Bank of India (RBI) is likely to maintain its key interest rate unchanged at 6.50% for a fifth consecutive meeting on December 8, according to a Reuters poll. US Core Personal Consumption Expenditures Price Index (Core PCE), the Federal Reserve’s preferred inflation gauge rose 0.2% MoM and 3.5% YoY in October. US Initial weekly Jobless Claims rose to 218K from the previous period week of 211K, below the 220K expected while the Continuing Claims surged to 1.930 million versus the 1.841 decline prior. US Gross Domestic Product Annualized for the third quarter (Q3) expanded 5.2% in the third quarter (Q3) from 4.9% in the previous reading, better than 5.0% estimated.Technical Analysis: The Indian Rupee maintains its positive viewIndian Rupee edges higher on the day. The USD/INR pair has traded within a familiar range of 82.80–83.40 since September. Technically, USD/INR maintains the bullish vibe as the pair holds above the key 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the upward momentum is reinforced by the 14-day Relative Strength Index (RSI) that holds above the 50.0 midline.

The upper boundary of the trading range at 83.40 acts as an immediate target for USD/INR bulls. Any follow-through buying will see the next hurdle at the year-to-date (YTD) high of 83.47, en route to a psychological round mark of 84.00. On the downside, the critical contention level will emerge at the 83.00 psychological mark. A breach of this level will pave the way to the confluence of the lower limit of the trading range and a low of September 12 at 82.80, followed by a low of August 11 at 82.60.US Dollar price todayThe table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  -0.14% -0.12% -0.11% -0.10% -0.03% -0.25% -0.07%EUR0.14%   0.00% 0.03% 0.04% 0.10% -0.11% 0.08%GBP0.12% -0.01%   0.01% 0.02% 0.09% -0.13% 0.06%CAD0.11% -0.02% -0.01%   0.01% 0.07% -0.13% 0.06%AUD0.10% -0.03% -0.02% 0.00%   0.06% -0.15% 0.04%JPY0.03% -0.08% -0.10% -0.08% -0.04%   -0.20% -0.02%NZD0.24% 0.11% 0.12% 0.13% 0.15% 0.22%   0.20%CHF0.06% -0.10% -0.08% -0.06% -0.05% 0.01% -0.20%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).Indian Rupee FAQsWhat are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

GBP/USD recovers its recent losses registered in the previous session, trading higher around 1.2650 during the Asian session on Friday.

GBP/USD trims recent losses on subdued US Dollar.BoE’s Megan Greene indicated that interest rates remain elevated to curb persistent high inflation.US Dollar retraces its recent gains on downbeat US Treasury yields.GBP/USD recovers its recent losses registered in the previous session, trading higher around 1.2650 during the Asian session on Friday. The GBP/USD pair strengthened on weaker US Dollar (USD) amid downbeat US Treasury yields. Additionally, Bank of England (BoE) officials have been sending hawkish signals throughout the week, providing a boost to the Pound Sterling (GBP). There is an estimate that the BoE will maintain higher interest rates for an extended period, especially considering that inflation is currently more than twice the central bank's target. Interest rate-setter Megan Greene from the Bank of England expressed concerns about persistently high inflation, indicating that interest rates might need to remain elevated for an extended duration. This perspective contrasts with some recent data suggesting a potential downturn in the economy. The US Dollar Index (DXY) encounters a challenge as the 2-year US Bond yield drops to 4.67%, by the press time, following recent gains. Despite the Greenback surging to 103.59 on Thursday, the DXY trades lower at 103.30. Moreover, the US Core Personal Consumption Expenditures Price Index (PCE) displayed a year-on-year easing to 3.5% in October from the previous reading of 3.7%, meeting expectations. The month-on-month Core PCE Price Index saw a decrease to 0.2% from the prior 0.3%. Additionally, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the expected 220K but higher than the revised previous figures of 211K (revised from 209K). Investors await Nationwide Housing Prices from the United Kingdom (UK) on Friday, along with the US ISM Manufacturing PMI for November. Moreover, the focus will be on US Federal Reserve (Fed) Chairman Jerome Powell’s speech.  

The USD/CAD pair remains under some selling pressure for the second straight day on Friday and drops to over a two-month low during the Asian session.

USD/AD drifts lower for the second straight day and drops to over a two-month low on Friday.Fed rate cut bets, the risk-on mood undermine the USD and exert some pressure on the pair.Investors now look to Canadian jobs data, US ISM PMI and Fed Chair Jerome Powell’s speech.The USD/CAD pair remains under some selling pressure for the second straight day on Friday and drops to over a two-month low during the Asian session. Spot prices currently trade around the 1.3540-1.3535 region and seem vulnerable to prolonging the recent well-established downtrend witnessed over the past three weeks or so. The US Dollar (USD) meets with a fresh supply and for now, seems to have stalled a two-day recovery from its lowest level since August 11 set on Wednesday, which, in turn, is seen exerting pressure on the USD/CAD pair. Investors seem convinced that the Federal Reserve (Fed) will not hike interest rates again and may begin easing its monetary policy as early as March 2024. The bets were reaffirmed by the US macro data released on Thursday, showing that inflation continued to moderate in October and a slowing labor market. The dovish outlook, meanwhile, triggers a fresh leg down in the US Treasury bond yields and weighs on the buck. Apart from this, the underlying bullish tone across the global equity markets, further dents the Greenbak's relative safe-haven status. The USD bulls, meanwhile, shrugged off the overnight hawkish remarks by Federal Reserve (Fed) officials. In fact, New York Fed Bank President John Williams, along with San Francisco Fed President Mary Daly, pushed back against expectations for a quick pivot to rate cuts and left the door open to further policy tightening should the progress on inflation stall. This suggests that the path of least resistance for the buck is to the downside and supports prospects for a further depreciating move for the USD/CAD pair. That said, Crude Oil prices remain on the defensive below a two-and-half-week high touched on Thursday amid concerns over worsening demand in China and the fact that the new production cuts announced by the OPEC+ were voluntary. The announcement came amid some disagreements among OPEC+ members over reductions in output and also disappointed traders hoping for deeper supply cuts. Furthermore, data on Thursday showed that the Canadian economy unexpectedly contracted at an annualized rate of 1.1% in the third quarter. This, in turn, could undermine the commodity-linked Loonie and lend support to the USD/CAD pair. Traders might also refrain from placing aggressive bets ahead of Friday's release of Canadian monthly employment details and the US ISM Manufacturing PMI. The focus, however, will remain on Fed Chair Jerome Powell's appearance later during the US session, which will play a key role in influencing the USD price dynamics and provide some meaningful impetus to the USD/CAD pair. Nevertheless, spot prices remain on track to register losses for the third straight week – also marking the fourth week of a fall in the previous five. Technical levels to watch  

Reserve Bank of New Zealand (RBNZ) Deputy Governor Christian Hawkesby said on Friday, “high and sticky core inflation leaves little room for error.” Additional comments Need to take seriously that some inflation expectation measures have ticked up.

Reserve Bank of New Zealand (RBNZ) Deputy Governor Christian Hawkesby said on Friday, “high and sticky core inflation leaves little room for error.” Additional comments Need to take seriously that some inflation expectation measures have ticked up. New Zealand needs a period of very subdued spending. Vast majority of borrowers able to services their debt at these interest rate levels. Related readsChina's Caixin Manufacturing PMI unexpectedly returns to expansion, with 50.7 in NovemberNZD/USD holds positive ground below 0.6200 following Chinese PMI data

The Japanese Yen (JPY) kicks off the new month on a positive note and recovers a major part of its previous day's losses against the US Dollar (USD) despite the recent less hawkish comments by Bank of Japan (BoJ) policymakers.

The Japanese Yen is back in demand on Friday and draws support from hawkish BoJ expectations.Fed rate cut bets prompt fresh selling around the USD and exert downward pressure on USD/JPY.Investors now look forward to Fed Chair Jerome Powell’s speech for some meaningful impetus.The Japanese Yen (JPY) kicks off the new month on a positive note and recovers a major part of its previous day's losses against the US Dollar (USD) despite the recent less hawkish comments by Bank of Japan (BoJ) policymakers. In fact, BoJ board members Seiji Adachi and Toyoaki Nakamura pushed back against market speculations about a major shift in the central bank's policy stance. Investors, however, seem convinced that a second consecutive year of significant wage hikes next year will offer an opportunity for the BoJ to consider stepping away from a decade-long monetary stimulus. This, to a larger extent, overshadows the upbeat market mood and acts as a tailwind for the JPY. The USD, on the other hand, stalls this week's solid recovery move from its lowest level since August 11 in the wake of firming expectations that the Federal Reserve (Fed) will not hike interest rates again. The bets were reaffirmed by the US macro data released on Thursday, showing that inflation continued to moderate in October and a slowing labour market. This triggers a fresh leg down in the US Treasury bond yields, which is seen undermining the Greenback and exerting some pressure on the USD/JPY pair. That said, the overnight hawkish remarks by FOMC members could lend support to the USD ahead of Fed Chair Jerome Powell's later during the US session this Friday. Daily Digest Market Movers: Japanese Yen bulls seem unaffected by the recent less hawkish remarks by BoJ officials Bank of Japan board member Seiji Adachi said on Wednesday that it was premature to debate an exit from negative interest rates as the country is yet to see a positive wage-inflation cycle become embedded enough. A fellow board member Toyoaki Nakamura noted on Thursday that now is not the time to consider shifting policy and that the BoJ must be cautious about phasing out its massive stimulus measures. Investors, meanwhile, expect that the substantial pay increases witnessed this year – the largest in over 30 years – will continue into 2024 and should allow the BoJ to pivot away from its dovish stance. Macro data released earlier this Friday showed that Japan's unemployment rate unexpectedly ticked down to 2.5% in October from 2.6% in the previous month and further underpins the Japanese Yen. The US Commerce Department reported on Thursday that inflation – as measured by the Personal Consumption Expenditures (PCE) Price Index – was unchanged in October as compared to 0.4% in September. Over the 12 months through October, the PCE Price Index decelerated from 3.4% to 3.0%, registering the smallest year-on-year increase since March 2021. The core PCE, which strips out volatile food and energy prices, rose by a modest 0.2% in October and saw an annual rise of 3.5%, matching expectations and pointing to signs of easing inflation. The number of Americans who applied for unemployment benefits rose by 7K to 218K during the week ended on November 25 and Continuing Claims surged to a two-year high. New York Fed Bank President John Williams said that the central bank's policy stance is the most restrictive in 25 years, and it will probably need to stay restrictive for quite some time. San Francisco Fed President Mary Daly struck a similar tone and noted that her base case does not call for any further rate hikes, though it was too early to know if the Fed is finished with the rate increases. The USD, however, struggles to attract any follow-through buying amid growing market conviction that the Fed may start easing its monetary policy as early as March 2024. Market participants now look forward to Fed Chair Jerome Powell's scheduled speeches later during the US session for short-term trading opportunities on the last day of the week. Technical Analysis: USD/JPY manages to hold its neck above 100-day SMA pivotal support, not out of the woods yet From a technical perspective, any subsequent decline might continue to find some support near the 100-day Simple Moving Average (SMA), currently pegged around the 147.15 region. This is followed by the 147.00 mark, below which the USD/JPY pair could slide back to the 146.65 region, or its lowest level since September 12 touched on Wednesday. Some follow-through selling could expose the 146.00 round figure before spot prices extend the downfall further towards the next relevant support near the mid-145.00s. On the flip side, the 148.00 round figure might now offer some resistance ahead of the overnight swing high, around the 148.50 region. A sustained strength beyond the latter might trigger a short-covering rally and allow the USD/JPY pair to reclaim the 149.00 mark. The momentum could get extended further towards the 149.55-149.60 supply zone. The latter should act as a key pivotal point, which if cleared will suggest that spot prices have formed a near-term bottom. Japanese Yen price in the last 30 days The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies in the last 30 days. Japanese Yen was the weakest against the New Zealand Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  -3.12% -4.14% -2.50% -4.52% -2.42% -6.55% -4.09%EUR3.02%   -1.00% 0.62% -1.38% 0.66% -3.35% -0.95%GBP3.98% 0.98%   1.60% -0.38% 1.63% -2.33% 0.06%CAD2.43% -0.62% -1.61%   -1.99% 0.07% -3.96% -1.56%AUD4.34% 1.36% 0.39% 1.95%   2.01% -1.93% 0.42%JPY2.35% -0.68% -1.68% -0.06% -2.09%   -4.08% -1.59%NZD6.15% 3.27% 2.28% 3.87% 1.91% 3.88%   2.34%CHF3.93% 0.93% -0.06% 1.53% -0.42% 1.58% -2.41%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. How does the differential between Japanese and US bond yields impact the Japanese Yen? The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

The Australian Dollar (AUD) manages to halt a two-day losing streak on Friday.

Australian Dollar recovers ground as the Greenback snaps recent gains.Australia’s Judo Bank Manufacturing PMI fell to 47.7 from the previous reading of 48.2.China's Manufacturing PMI improved to 50.7 against the expected decline to 49.8 from 49.5 prior.US Core PCE Price Index YoY and MoM eased at 3.5% and 0.2%, respectively.The Australian Dollar (AUD) manages to halt a two-day losing streak on Friday. However, the recovery in the US Dollar contributed a pressure on the AUD/USD pair. Furthermore, disappointing Chinese data on Thursday exerted downward pressure on market sentiment, causing the China-linked Australian Dollar (AUD) to decline. Australia’s Judo Bank Manufacturing PMI for November met expectations at 47.7, showing a slight dip from the previous reading of 48.2. The Reserve Bank of Australia is set to release the RBA Commodity Index SDR later today. This data holds significance as it serves as an early indicator of changes in export prices, thereby influencing both GDP and the value of the AUD. China's Caixin Manufacturing PMI exceeded expectations by improving to 50.7 in November, defying the anticipated decline to 49.8 from the previous reading of 49.5. This positive surprise in the data has the potential to provide support and bolster the Australian Dollar, given the interconnected economic dynamics between China and Australia. The US Dollar Index (DXY) surged as the US Treasury bond yield edged higher, with the 2 and 10-year Treasury yields reached at 4.73% and 4.36%, respectively on Thursday. Furthermore, the Greenback might have found support in economic data from the United States (US). US Core Personal Consumption Expenditures Price Index (PCE) showed a year-on-year easing to 3.5% in October from the previous reading of 3.7%, aligning with expectations. The month-on-month Core PCE Price Index decreased to 0.2% from the prior 0.3%. Additionally, Initial Jobless Claims for the week ending November 24 totaled 218K, slightly below the anticipated 220K but higher than the revised previous figures of 211K (revised from 209K). Daily Digest Market Movers: Australian Dollar gains ground on subdued US Dollar Australia's Private Capital Expenditure experienced a decline of 0.6% in Q3, contrasting with the previous growth of 2.8%. This contraction fell short of the expected rise of 1.0%. Aussie Monthly Consumer Price Index (CPI) for October shows a reading of 4.9%, a decrease from the previous reading of 5.6% in September and slightly below the expected 5.2%. Reserve Bank of Australia (RBA) Governor Michele Bullock highlighted that the current monetary policy is on the restrictive side, with rate hikes putting a damper on demand, particularly in the context of persistent services inflation. Governor Bullock emphasized the need for caution in employing high interest rates to combat inflation without inadvertently raising the unemployment rate. China's NBS Manufacturing PMI for November decreased to 49.4 from the previous reading of 49.5. The market expectation was for an increase to 49.7. The Non-Manufacturing PMI contracted to 50.2, falling short of the expected 51.1 and the previous reading of 50.6. US Gross Domestic Product Annualized increased by 5.2% during the third quarter from the previous reading of 4.9%, above the market consensus of 5.0. The latest Fed's Beige Book unveiled that the demand for labor has been "continuing to ease" over the weeks leading up to mid-November. Technical Analysis: Australian Dollar maintains its position below the 0.6650 resistance level The Australian Dollar trades higher around 0.6620 on Friday. The immediate hurdle appears to be the significant level at 0.6650, with November's high at 0.6676 following closely. If the pair successfully surpasses this level, it could pave the way for a test of the substantial resistance at the psychological mark of 0.6700, and beyond that, the August high at 0.6723. Conversely, on the downside, a critical support zone is situated around the psychological level of 0.6600, aligning with the seven-day Exponential Moving Average (EMA) at 0.6599. A clear breach below the EMA might lead the pair towards support near the 23.6% Fibonacci retracement level at 0.6580, followed by the major level at 0.6550. AUD/USD: Daily Chart Australian Dollar price today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  -0.14% -0.19% -0.13% -0.29% -0.19% -0.51% -0.06%EUR0.14%   -0.07% 0.00% -0.16% -0.07% -0.39% 0.08%GBP0.19% 0.05%   -0.01% -0.12% -0.01% -0.34% 0.12%CAD0.14% 0.01% -0.05%   -0.15% -0.06% -0.39% 0.09%AUD0.29% 0.17% 0.10% 0.17%   0.10% -0.22% 0.25%JPY0.19% 0.06% -0.01% 0.07% -0.10%   -0.34% 0.14%NZD0.51% 0.38% 0.32% 0.38% 0.22% 0.32%   0.46%CHF0.06% -0.08% -0.13% -0.08% -0.24% -0.16% -0.47%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

China's Caixin Manufacturing Purchasing Managers' Index (PMI) unexpectedly expanded to 50.7 in November when compared to October’s contraction of 49.5, the latest data published on Friday.

China's Caixin Manufacturing Purchasing Managers' Index (PMI) unexpectedly expanded to 50.7 in November when compared to October’s contraction of 49.5, the latest data published on Friday. The market consensus was for a 49.8 readout.

China Caixin Manufacturing PMI came in at 50.7, above forecasts (49.8) in November

The NZD/USD pair drifts higher to 0.6185 during the early Asian session on Friday.

NZD/USD holds positive ground near 0.6185, up 0.44% on the day.The Core PCE, the Fed’s inflation gauge, fell to its lowest level since the spring of 2021.New Zealand’s Roy Morgan Consumer Confidence Index rose 4 to 91.9 in November vs. 88.1 prior.Traders will monitor US ISM Manufacturing PMI, Fed Chair Jerome Powell’s speech on Friday.The NZD/USD pair drifts higher to 0.6185 during the early Asian session on Friday. The pair trades in positive territory for the third consecutive week, bolstered by the weaker US Dollar (USD). However, the 100-day Exponential Moving Average at 0.6200 on the weekly chart might cap the upside of NZD/USD.

According to data published Thursday, the Core Personal Consumption Expenditures Price Index, which excludes volatile gas and food prices, climbed 0.2% MoM and 3.5% YoY in October. The Federal Reserve’s preferred inflation gauge fell to its lowest level since the spring of 2021.

Signs of cooling demand boosted the anticipation that the Fed's rate-hiking cycle was coming to an end. Policymakers hinted on Thursday that rate hikes were likely done, but pushed back the expectations of a rate cut.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) maintained the Official Cash Rate (OCR) at 5.50%, as widely expected. However, the forecast peak OCR was raised from 5.59% to 5.69% and the RBNZ is likely to cut the rate for the first half of 2025, which is a bit later than previously estimated.

The latest data on Friday showed that New Zealand’s Roy Morgan Consumer Confidence Index rose 4 to 91.9 in November from 88.1 in the previous reading. Despite the improvement, retailers continue to face substantial headwinds due to declining consumer spending and pessimistic sentiment. Moving on, market players will focus on the US ISM Manufacturing PMI for November. The figure is estimated to climb to 47.6 from 46.7. Additionally, Fed Chair Jerome Powell and Fed's Goolsbee are set to speak and might offer some hints about further monetary policy paths. Market players will take cues from these events and find trading opportunities around the NZD/USD pair.  

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1104 as compared to the previous day's fix of 7.1018 and 7.1458 Reuters estimates.

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1104 as compared to the previous day's fix of 7.1018 and  7.1458 Reuters estimates.

Ireland Purchasing Manager Index Manufacturing increased to 50 in November from previous 48.2

The EUR/USD pair hovers around the 1.0900 psychological mark after retracing from the multi-month high of 1.1017 during the early Asian trading hours on Friday.

EUR/USD finds support above 1.0900 on the softer Eurozone inflation data.Eurozone HICP eased to 2.4% YoY in November vs. 2.9% prior, the slowest annual pace since July 2021.Markets anticipate the Fed won’t raise rates at any of its upcoming meetings and might start cutting rates in the middle of 2024.Investors await ECB President Lagarde's speech, US ISM Manufacturing PMI on Friday.The EUR/USD pair hovers around the 1.0900 psychological mark after retracing from the multi-month high of 1.1017 during the early Asian trading hours on Friday. Falling inflation and a stagnant economy in the Eurozone fuel hopes that interest rates could soon be cut. Nonetheless, the weaker US Dollar (USD) might cap the downside of the pair. The major pair currently trades around 1.0902, up 0.16% on the day.

Data from Eurostat revealed on Thursday that inflation in the eurozone, as measured by the Harmonized Index of Consumer Prices (HICP) eased to 2.4% YoY in November from 2.9% in the previous reading, the slowest annual pace since July 2021. On a monthly basis, the inflation figure dropped 0.5% versus a 0.1% rise previously. The main drivers for the slowing in HICP were falling energy costs and lower growth in food and service prices.

The Eurozone inflation report has spurred investors on speculation that the European Central Bank will begin cutting its deposit rate as soon as next April. However, ECB President Christine Lagarde cautioned this week that it was not the time to start declaring victory as wage pressures remain strong.

Across the pond, the markets anticipate the likelihood that the Federal Reserve (Fed) won’t raise rates at any of its upcoming meetings and might start cutting rates in the middle of 2024. This, in turn, weighs on the US Dollar (USD) and acts as a tailwind for the EUR/USD pair.

About the data, the US Core Personal Consumption Expenditures Price Index (core PCE), rose 0.2% MoM and 3.5% YoY in October, in line with the expectation. Meanwhile, the Initial weekly Jobless Claims rose to 218K from the previous period week of 211K, below the 220K estimated. The Continuing Claims surged to 1.93 million, the highest level since November 27, 2021.

Market participants will keep an eye on ECB President Lagarde's speech on Friday for fresh impetus. In the American session, the US ISM Manufacturing PMI for November will be released and Fed Chair Jerome Powell is set to speak.  

Japan Jibun Bank Manufacturing PMI above forecasts (48.1) in November: Actual (48.3)

South Korea S&P Global Manufacturing PMI rose from previous 49.8 to 50 in November

South Korea Trade Balance above expectations ($1.3B) in November: Actual ($3.8B)

Japan Capital Spending down to 3.4% in 3Q from previous 4.5%

Gold price (XAU/USD) recovers its recent losses near $2,040 during the early Asian session on Friday.

Gold price holds positive ground around $2,040, gaining 0.17% in early Friday’s Asian session.Both the monthly and annual Core Personal Consumption Expenditures Price Index (Core PCE) increased in line with expectations.The futures market is pricing the possibility that the Fed won't raise rates further in its next meetings.Gold price (XAU/USD) recovers its recent losses near $2,040 during the early Asian session on Friday. The anticipation that the Federal Reserve (Fed) to hold rates steady and perhaps start cutting in 2024 weighs on the US Dollar (USD) and lends some support to the USD-denominated gold.

Meanwhile, the gauge of the value of the USD against a weighted basket of currencies used by US trade partners climbs above 103.50. The Treasury yields edge higher, with the 10-year yield recovering from 4.24% to 4.32%.

The US inflation, as measured by the Personal Consumption Expenditures Price Index, excluding food and energy prices (core PCE) climbed 0.2% MoM and 3.5% YoY in October. Both figures increased in line with expectations, the Commerce Department reported on Thursday.

Additionally, the Labor Department reported that the Initial weekly Jobless Claims rose to 218,000, an increase of 7,000 from the previous period week, below the 220,000 expected. Meanwhile, the Continuing Claims surged to 1.93 million, an increase of 86,000 and the highest level since November 27, 2021.

The futures market is pricing the possibility that the Fed won't raise rates further in its next meetings and will instead begin cutting rates by the spring of next year as the PCE reading, along with signs of a loosening labor market, might reinforce that view. The anticipation of the tighening cycle ending might benefit the yellow metal. That being said, gold tends to rise with lower interest rates, whereas higher interest rates put pressure on the yellow metal.

Looking ahead, the Chinese Caixin Manufacturing PMI for November will be released, which is estimated to rise from 49.5 to 49.8. The weaker data could exert some pressure on the gold price as China is the world's largest gold producer and consumer. Furthermore, the US ISM Manufacturing PMI for November and Fed Chair Jerome Powell’s speech will be closely watched.
   

Japan Jobs / Applicants Ratio came in at 1.3, above forecasts (1.29) in October

Japan Unemployment Rate below forecasts (2.6%) in October: Actual (2.5%)

The EUR/JPY extends its losses for the fourth straight day, but price action seems to have formed a doji, suggesting the downtrend could be stalling ahead of the weekend.

EUR/JPY pair shows signs of stabilization, trading flat at 161.33 in the early Friday Asian session.Despite recent losses, the overall uptrend remains intact, with bulls eyeing the Tenkan-Sen at 161.88 to reinforce the upward momentum.Bears aim to drive the pair below the Kijun-Sen at 161.00, with subsequent support at Senkou Span B (159.32) and the November monthly low (159.06).The EUR/JPY extends its losses for the fourth straight day, but price action seems to have formed a doji, suggesting the downtrend could be stalling ahead of the weekend. At the time of writing, the pair is trading at 161.33, flat as the Friday Asian session begins. The uptrend remains intact, even though the pair fell to a weekly low of 169.59. On its way south the EUR/JPY broke key support levels like the Kijun-Sen at 161.00, which buyers later reclaimed, as the pair printed a close at 161.33. That said, bulls are in charge, but they must reclaim the Tenkan-Sen at 161.88, to cement the bullish bias and challenge 162.00. A breach of the latter will expose 163.00, before testing the November 27 high at 163.71. Conversely, bears need to push prices below the Kijun-Sen at 161.00. Once cleared, the next support emerges at the Senkou Span B at 159.32, followed by the November monthly low of 159.06. EUR/JPY Price Analysis – Daily Chart EUR/JPY Technical Levels  

The AUD/NZD is testing into near-term lows around the 1.0730 level as the Aussie (AUD) struggles to find a foothold against the Kiwi (NZD) after a mid-week plunge took the pair down 1.3% from 1.0861 into new lows at 1.0720.

AUD/NZD stuck near 1.0730 as the pair fails to find a reason to bid out of recent lows.The Kiwi's strong showing across the FX markets is keeping the Aussie on the backfoot.The Kiwi is the strongest performer of the major currencies, in the green against all contenders.The AUD/NZD is testing into near-term lows around the 1.0730 level as the Aussie (AUD) struggles to find a foothold against the Kiwi (NZD) after a mid-week plunge took the pair down 1.3% from 1.0861 into new lows at 1.0720. The AUD/NZD's recent backslide took the pair cleanly through the last swing low and the 200-day Simple Moving Average (SMA), both near 1.0800 with the 50-day SMA stuck into the midrange against the longer-term moving average. The way is open for further declines into 1.0625 at early October's lows, provided sellers can push the pair through technical support from the mid-years low points at 1.0730 which is challenging the current bids. The Kiwi is the single strongest currency of the majors this week, in the green against the entire major currency bloc from Monday's opening bids. On the flip side of that, the Aussie sees a mixed showing at best, with the AUD/NZD down nine-tenths of one percent on the week. Australian Dollar price this week The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the weakest against the New Zealand Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  0.45% -0.21% -0.51% -0.37% -0.95% -1.28% -0.81%EUR-0.45%   -0.67% -0.97% -0.84% -1.40% -1.74% -1.27%GBP0.22% 0.66%   -0.31% -0.16% -0.73% -1.07% -0.62%CAD0.52% 0.97% 0.30%   0.16% -0.43% -0.76% -0.30%AUD0.39% 0.84% 0.18% -0.12%   -0.55% -0.88% -0.41%JPY0.94% 1.39% 0.65% 0.45% 0.58%   -0.32% 0.12%NZD1.27% 1.71% 1.04% 0.75% 0.89% 0.34%   0.45%CHF0.82% 1.26% 0.60% 0.30% 0.44% -0.13% -0.46%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). AUD/NZD Hourly Chart AUD/NZD Daily Chart AUD/NZD Technical Levels

The AUD/USD pair holds above the 0.6600 psychological mark during the early Asian session on Friday.

AUD/USD loses ground around 0.6605 amid the rebound of USD.US Core PCE fell by 3.5% YoY in October vs. 3.7% prior, in line with expectations.Australian Judo Bank Manufacturing PMI remained steady at 47.7 in November.Traders will focus on the US ISM Manufacturing PMI and Fed's Chair Powell speech.The AUD/USD pair holds above the 0.6600 psychological mark during the early Asian session on Friday. However, the rebound of the US Dollar (USD) might cap the pair’s upside in the near term. Meanwhile, the US Dollar Index (DXY) surges to 103.50 while the US Treasury bond yield edge higher, with the 10-year Treasury yield standing at 4.328%. AUD/USD currently trades near 0.6605, down 0.03% on the day.

On Thursday, the US Core Personal Consumption Expenditure Price Index (PCE) fell by 3.5% YoY in October from 3.7% in the previous reading, in line with expectations. The weekly Jobless Claims totalled 218K while the Continuing Claims rose to the highest level since November 2021, rising to 1.927 million. The markets expect the conditions for rate cuts will emerge from the middle of 2024.

On the AUD’s front, the latest data on Friday revealed that the Australian Judo Bank Manufacturing PMI remained steady at 47.7 in November. Additionally, the weaker-than-expected Chinese data on Thursday weighed on market sentiment and dragged the China-proxy Australian Dollar (AUD) lower.

That being said, the Chinese NBS Manufacturing PMI for November dropped to 49.4 in November from 49.5 in October, worse than the market expectation of 49.7. The Non-Manufacturing PMI declined to 50.2 versus 50.6 prior, missing the estimated 51.1. However, the development surrounding the fresh stimulus measure from the Chinese government could benefit the AUD and cap the downside of the pair.

Moving on, traders will monitor the US ISM Manufacturing PMI for November, which is expected to grow to 47.6 from 46.7. Also, the Federal Reserve (Fed) Chair Jerome Powell and Fed's Goolsbee are set to speak. Market players will take cues from these events and find trading opportunities around the AUD/USD pair.  

Australian Manufacturing Purchasing Managers' Index data for November saw the headline index decline for the ninth-straight month into 47.7 on the month, down from October's official reading of 48.2.

Australia's manufacturing sector continues to contract head into the year-end.Australian Manufacturing PMIs slid to 47.7 in November, a ninth-straight monthly contraction.Australian Manufacturing Purchasing Managers' Index data for November saw the headline index decline for the ninth-straight month into 47.7 on the month, down from October's official reading of 48.2. Orderbook volumes and manufacturing production levels both declined for a twelfth straight month, and a lack of capacity pressure saw sector employment decline for the first time in three years. According to Warren Hogan, Chief Economic Advisor at Judo Bank, “The Australian Manufacturing PMI fell further in November to record the lowest reading in the 8-year history of the survey outside of periods of lockdown. The PMI fell below 48 which is an index level broadly consistent with a soft landing for the manufacturing sector and the wider economy." Market Reaction The AUD/USD is seeing little movement heading into the Asia Friday market session, trading close to the 0.6600 handle. About the Australia Judo Bank Manufacturing PMI The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for AUD.

The Australian Dollar (AUD) snapped three days of losses against the Japanese Yen (JPY).

AUD/JPY pair makes a strong recovery, climbing to 97.89, marking a 0.49% increase.A bullish engulfing candle pattern signals a potential continuation of the uptrend, following a dip to a weekly low of 97.23.Key resistance levels to watch include 98.10 (November 30 high), 98.54 (November 24 high), and the year-to-date high of 98.58, with the psychological 99.00 level in sight.Support levels are identified at 97.68 (Tenkan-Sen), 97.15 (Senkou Span A), 97.00, and 96.62 (Kijun-Sen).The Australian Dollar (AUD) snapped three days of losses against the Japanese Yen (JPY). A bullish engulfing candle pattern emerged after the pair tumbled to a new weekly low of 97.23, but buyers lifted the cross toward current exchange rates of 97.89, as the pair registered solid gains of 0.49%. Even though the pair enjoyed a pullback that lasted three days, the pair is resuming its ongoing uptrend, but buyers need to achieve a daily close above 98.00 to remain hopeful of pushing prices higher. If that outcome, the pair's first resistance would be the November 30 high at 98.10, followed by the November 24 swing high at 98.54. once the AUD/JPY surpasses that level, the year-to-date (YTD) high is up next at 98.58, ahead of the 99.00 figure. On the flip side, the AUD/JPY first support would be the Tenkan-Sen at 97.68 ahead of dropping to the Senkou Span A at 97.15. Once cleared, the next floor would be 97.00, followed by the Kijun-Sen at 96.62. AUD/JPY Price Analysis – Daily Chart AUD/JPY Technical Levels  

The Roy Morgan Consumer Confidence index rose 4 points in November to 91.9, an improvement but still subdued.

ANZ's New Zealand Consumer Confidence saw a continued rebound from record lows.Current conditions saw an improvement, while the future conditions index remains down.The Roy Morgan Consumer Confidence index rose 4 points in November to 91.9, an improvement but still subdued. Despite the improvement, significant headwinds remain for retailers under declining retail spending as consumers remain gloomy. Consumers' 12-month expectations declined 3 points to -21%, while the 5-year outlook rose to 9% from 5%. Two-year look-ahead CPI expectations saw a slight uptick from 4.5% to 4.6% as consumers fear long-run inflation gripping the New Zealand economy. The Reserve Bank of New Zealand (RBNZ) sees a mixed bag in the latest Consumer Confidence report, according to ANZ Research. New Zealanders' willingness to spend remains low, which will help alleviate inflation pressures, but inflation expectations remain high, with little progress in recent months. Market Reaction The NZD/USD saw little reaction on the release, trading close to 0.6150, but markets are overall subdued heading into the Asia Friday market session.  About the Roy Morgan ANZ Consumer Confidence Index The Consumer Confidence released by the ANZ is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative (or bearish).

In Thursday's session, the NZD/JPY initiated a bullish move, touching a peak of 91.38, it highest since April 2015.

NZD/JPY rallied more than 0.70%  to hit 91.38, its highest since April 2015.Daily RSI and MACD show good upward momentum, hinting at increasing buying pressure.Indicators near overbought conditions in the four-hour chart.In Thursday's session, the NZD/JPY initiated a bullish move, touching a peak of 91.38, it highest since April 2015. This positive momentum echoed in the daily and four-hour charts and signals that bulls are in command over the bears while steering the pair into overbought conditions. The overall scenario suggests a continuing bullish bias for the short-term. In line with that, the positive slope of the daily Relative Strength Index (RSI), positioned in positive territory pointing north, signifies a potent bullish dominance. Simultaneously, the Moving Average Convergence Divergence (MACD) corresponds to rising green bars, contributing to the buying dominance. Moreover, on a broader scale, the pair is above its three key Simple Moving Averages (SMAs). Its position over the 20, 100, and 200-day SMAs provides additional confirmation that the bulls are firmly in control. Switching to the shorter-term chart, the four-hour metrics reiterate the dominance of the bullish scenario. The uptrend in the Relative Strength Index (RSI) on the four-hour chart, remaining in positive territory, cements the assertion of bullish control. Furthermore, the rising green bars of the four-hour Moving Average Convergence Divergence (MACD) embody an increasing bullish sentiment in the short term. 
Support Levels: 89.85 (20-day SMA), 89.30, 89.00.
Resistance Levels: 91.38, 91.50, 91.70.
NZD/JPY daily chart    

Australia Judo Bank Manufacturing PMI remains unchanged at 47.7 in November

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