Forex Today: Dollar consolidates gains, trading conditions to remain thin

Eren Sengezer FXStreet

Here is what you need to know on Thursday, November 25:

The dollar continued to gather strength against its major rivals following the high-tier data releases from the US and the US Dollar Index came within a touching distance of 97.00 before going into a consolidation on Thursday. The European Central Bank (ECB) will release its Monetary Policy Meeting Accounts, ECB President Christine Lagarde and Bank of England Governor Bailey will be delivering speeches as well. Market conditions are likely to remain thin in the second half of the day due to the Thanksgiving holiday in the US.

The data from the US revealed on Wednesday that the Core Personal Consumption Expenditures (PCE) Price Index climbed to 4.1% on a yearly basis as expected. The FOMC's November meeting minutes revealed that some policymakers wanted the Fed to be prepared to adjust the pace of reductions in asset purchases to counter persistently high inflation. In the meantime, San Francisco Fed President Mary Daly said that she would support an acceleration of tapering if the economic recovery and the inflation outlook remains unchanged.

The benchmark 10-year US Treasury bond yield continued to climb higher toward 1.7% and Wall Street's main indexes closed mixed.

EUR/USD dropped to its lowest level since June 2020 at 1.1185 on Wednesday and clings to modest daily gains in the early European session above 1.1200 on Thursday.

GBP/USD extended its weekly slide toward 1.3300 but managed to stage a modest rebound. Ireland reportedly sees a "window of opportunity" to reach an agreement on Brexit's Northern Ireland protocol.

USD/JPY capitalized on rising US Treasury bond yields and renewed multi-year highs near 115.50. The pair was last seen moving sideways around 115.40.

Gold briefly dipped below $1,780 on Thursday pressured by rising US Treasury bond yields. XAU/USD is currently posting recovery gains above $1,790.

USD/CAD, which advanced to its strongest level in nearly two months at 1.2745 earlier in the week, is edging lower toward 1.2650 on recovering crude oil prices on Thursday.

Cryptocurrencies: Bitcoin stays directionless below $60,000 on Thursday and Ethereum consolidates its weekly losses while holding above $4,000.

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.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.