Forex Today: Major pairs remain within weekly ranges on thin holiday trading
Here is what you need to know on Friday, November 28:
Financial markets stay relatively quiet early Friday following Thursday's choppy action. Stock and bond markets in the US will close early on Black Friday, causing trading volumes to remain thin heading into the weekend. In the second half of the day, third-quarter Gross Domestic Product (GDP) data from Canada will be featured in the economic calendar.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.51% | -0.83% | -0.17% | -0.42% | -1.00% | -1.68% | -0.32% | |
| EUR | 0.51% | -0.30% | 0.36% | 0.11% | -0.49% | -1.17% | 0.19% | |
| GBP | 0.83% | 0.30% | 0.66% | 0.42% | -0.18% | -0.85% | 0.49% | |
| JPY | 0.17% | -0.36% | -0.66% | -0.24% | -0.89% | -1.65% | -0.17% | |
| CAD | 0.42% | -0.11% | -0.42% | 0.24% | -0.58% | -1.27% | 0.08% | |
| AUD | 1.00% | 0.49% | 0.18% | 0.89% | 0.58% | -0.68% | 0.70% | |
| NZD | 1.68% | 1.17% | 0.85% | 1.65% | 1.27% | 0.68% | 1.37% | |
| CHF | 0.32% | -0.19% | -0.49% | 0.17% | -0.08% | -0.70% | -1.37% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Dollar (USD) Index closed the day virtually unchanged on the Thanksgiving Day on Thursday. Early Friday, the USD Index edges higher and holds above 99.50. The Federal Reserve's (Fed) blackout period will start this Saturday.
The data from Germany showed on Friday that Retail Sales declined by 0.3% on a monthly basis in October. This reading followed the 0.3% expansion recorded in September and came in worse than the market expectation for an increase of 0.2%. EUR/USD stays under modest bearish pressure in the European morning and trades below 1.1600.
The Unemployment Rate in Japan remained unchanged at 2.6% in October, compared to analysts' estimate of 2.5%. Other data from Japan showed that the annual Consumer Price Index (CPI) inflation in Tokyo declined to 2.7% in November from 2.8% in October, matching the market expectation. After posting small losses on Thursday, USD/JPY moves sideways above 156.00 in the European morning on Friday.
Following the strong rally seen earlier in the week, GBP/USD corrects lower and declines toward 1.3200 on Friday. The pair, however, remains on track to end the week in positive territory.
After failing to make a decisive move in either direction on Thursday, Gold gained traction in the Asian session on Friday. At the time of press, XAU/USD was trading above $4,170, rising more than 2.5% on a weekly basis.
USD/CAD holds steady near 1.4050 after closing the previous three days in negative territory. The Canadian economy is forecast to expand at an annual rate of 0.5% in the third quarter, following the 1.6% contraction recorded in the previous quarter.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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.
