What you need to know on Thursday, November 25:
Demand for the greenback persisted after a batch of US data hinted at stubbornly high inflationary pressures and soon-to-come Federal Reserve action to counter its effects on the economy.
On Wednesday, market participants knew that US inflation soared to its highest in 30-years in October, according to the Core Personal Consumption Expenditures Price Index report. Also, the FOMC published the Minutes of its November meeting. The document showed that policymakers believe they should be prepared to adjust the pace of the asset purchases tapering and raise the target range for the federal funds rate sooner than currently anticipated should inflation continue to run hot. Still, the market’s reaction was quite limited as there were no surprises in the statement.
The EUR/USD pair trades below the 1.1200 figure, hit by local data and ECB’s inaction. Germany published the November IFO survey, which showed that the Business Climate contracted to 96.5, falling for a fifth consecutive month, while Germany published the November IFO survey, which showed that the Business Climate contracted to 96.5, falling for a fifth consecutive month noted that the central bank must not tighten monetary policy too early in response to an inflation spike driven by “purely temporary factors.”
Another factor hitting the EUR and the market’s mood, in general, is the resurgent spread of coronavirus in Europe. Several countries are taking fresh restrictive measures and studying making vaccines mandatory.
GBP/USD came under renewed bearish pressure and dropped to the current 1.3320 region. Bank of England Monetary Policy Committee member Silvana Tenreyro said on Wednesday that she would not want to say specifically if the BOE would make its first rate hike in either December or February. Instead, she prefers a “modest” tightening of the monetary policy.
The USD/JPY pair reached a fresh 2021 high of 115.51, holding nearby at the end of the day. Commodity-linked currencies shed ground unevenly, with AUD/USD now trading below 0.7200 and USD/CAD at around 1.2670.
Global stocks traded in a dull fashion, with European and American indexes mixed around their opening levels.
US Treasury yields are ending the day with modest losses. Nevertheless, the yield on the 10-year note peaked at 1.693%, retreating from the critical 1.70% threshold.
Gold is modestly lower on a daily basis, now trading around $1,785 a troy ounce. Crude oil prices eased modestly, with WTI currently at $78.25 a barrel.
Bitcoin could dodge a steep correction if BTC holds above this price level
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.