Forex Today: Choppy action continues amid thin holiday trading

Eren Sengezer FXStreet

Here is what you need to know on Wednesday, December 27:

Following a long weekend, the US Dollar (USD) continued to weaken against its rivals on Tuesday. Although major markets are back in action on Wednesday, thin trading conditions cause the action to remain choppy. Weekly MBA Mortgage Applications and Richmond Fed Manufacturing Index will be featured in the US economic docket in the second half of the day.

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Canadian Dollar.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		-0.17%	-0.10%	-0.64%	-0.54%	0.16%	-0.57%	-0.27%
EUR	0.27%		0.10%	-0.34%	-0.29%	0.36%	-0.29%	-0.01%
GBP	0.23%	-0.16%		-0.27%	-0.42%	0.23%	-0.29%	-0.29%
CAD	0.64%	0.14%	0.48%		-0.15%	0.80%	0.23%	0.21%
AUD	0.53%	0.29%	0.41%	-0.10%		0.65%	0.00%	0.06%
JPY	-0.15%	-0.30%	-0.44%	-0.51%	-0.66%		-0.53%	-0.58%
NZD	0.57%	0.33%	0.48%	-0.07%	0.00%	0.65%		0.35%
CHF	0.48%	0.01%	0.02%	-0.19%	0.00%	0.59%	-0.25%

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).

After losing nearly 1% in the previous week, the USD Index edged lower to start the last week of 2023. At the time of press, the index was flat on the day slightly below 101.50 and the benchmark 10-year US Treasury bond yield was down more than 0.5% below 3.9%.

EUR/USD touched its highest level since August near 1.1050 on Tuesday and stabilized near that level early Wednesday.

During the Asian trading hours, the Bank of Japan (BoJ) published the Summary of Opinions of the December monetary policy meeting. The publication reiterated that policymakers saw the need to maintain the ultra-easy monetary policy for now. USD/JPY rose sharply toward 143.00 in the early Asian session but lost its bullish momentum before settling above 142.50. November Retail Trade and Industrial Production data from Japan will be looked upon for fresh impetus early Thursday.

GBP/USD registered small gains and stabilized above 1.2700 early Wednesday. Nationwide Housing Prices for December, which will be released on Friday, will be the only data featured in the UK economic this week.

Gold climbed above $2,060 on Tuesday but struggled to preserve its bullish momentum.

AUD/USD gained traction on persistent USD weakness and advanced beyond 0.6800 to reach its highest level since July. Similarly, NZD/USD was last seen trading at its strongest level in five months above 0.6300.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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