Forecasting the upcoming week: Could Thanksgiving trigger a pause in the Dollar’s rally?

The US Dollar maintained its strongly bullish stance for yet another week, reaching levels last seen over two years ago. This continued rally has been fueled by a reassessment of the potential implications of Donald Trump’s second term in office.

The US Dollar Index (DXY) advanced further and trespassed the 108.00 barrier for the first time since early November 2022 amid a gradual uptick in US yields across the curve. The Chicago Fed National Activity Index kicks off the weekly calendar on November 25, seconded by the Dallas Fed Manufacturing Index. On November 26 comes the FHFA’s House Price Index along with the Conference Board’s Consumer Confidence, new Home Sales, the FOMC Minutes, and the API’s weekly report on US crude oil inventories. The PCE will take centre stage on November 27, seconded by the usual weekly Mortgage Applications tracked by MBA, the Chicago PMI, Durable Goods Orders, Personal Income and Spending, Wholesale Inventories, the usual weekly Initial Jobless Claims, Pending Home Sales and the EIA’s weekly report on US crude oil supplies. US markets will be closed on November 28 due to the Thanksgiving Day holiday.

EUR/USD remained well on the defensive and retreated to two-year lows near 1.0330 on the back of extra strength in the Greenback and poor domestic fundamentals. Germany’s IFO Business Climate is next on tap on November 25, while GfK’s Consumer Confidence will come on November 27. Advanced Inflation Rate in Germany takes centre stage on November 28, followed by EMU’s Economic Sentiment and the final Consumer Confidence. The German labour market report and Retail Sales are due on November 29, seconded by EMU’s preliminary Inflation Rate and Consumer Inflation Expectations.

GBP/USD tumbled to multi-month lows and revisited the sub-1.2500 region in response to the increasing buying interest in the US Dollar and disappointing UK data. The CBI Distributive Trades will be published on November 26, while Car Production results are expected on November 28. The Nationwide Housing Prices, Mortgage Approvals, M4 Money Supply, and the BoE’s Financial Stability Report (FSR) will close the calendar on November 29.

USD/JPY clinched its second consecutive weekly advance following Dollar’s gains and despite some hawkish comments from BoJ’s officials. The final Coincident Index and Leading Economic Index are due on November 25, followed by weekly Foreign Bond Investment figures due on November 28. The Unemployment Rate, the Tokyo CPI, flash Industrial Production, Retail Sales, Consumer Confidence, Housing Starts, and Construction Orders are all expected on November 29.

AUD/USD managed to reverse part of the weakness seen on the weekly chart, ending the week around the key 0.6500 region. The RBA’s Monthly CPI Indicator is due on November 27 along with Construction Work Done. The Private Capital Expenditure is due on November 28, while Housing Credit and Private Sector Credit figures will be released on November 29.

Anticipating Economic Perspectives: Voices on the Horizon

• The ECB’s Lane and Nagel speak on November 25, followed by the BoE’s Lombardelli and Dhingra.
• The ECB’s McCaul speaks on November 26.
• The ECB’s Lane will speak on November 27.
• The RBA’s Bullock is due to speak on November 28, followed by the ECB’s Elderson and Lane.
• The ECB’s De Guindos speaks on November 29.

Central Banks: Upcoming Meetings to Shape Monetary Policies

• The RBNZ will meet on November 27.
• The Bank of Korea (BoK) will decide on rates on November 28.