Forex Today: US data dump, FOMC Minutes to rock markets ahead of Thanksgiving break

Eren Sengezer FXStreet

Here is what you need to know on Wednesday, November 24:

The greenback stays resilient against its major rivals mid-week as the benchmark 10-year US Treasury bond yield holds above 1.6%. Investors await IFO surveys from Germany ahead of the pre-Thanksgiving data releases from the US, which will include Durable Goods Orders, PCE inflation, Q3 GDP (second estimate) and weekly Initial Jobless Claims. Later in the American session, the FOMC will release the minutes of its November meeting.

The US Dollar Index is moving sideways around 96.50 on Wednesday. On Tuesday, the 10-year US T-bond yield came within a touching distance of the critical 1.7% level before retreating during the Asian trading hours. Market participants will keep a close eye on the PCE inflation report, which could have an impact on the June 2022 Fed rate hike bets and yields. The FOMC Minutes is unlikely to offer any surprises regarding the inflation or the policy outlook since the meeting had taken place before the October Consumer Price Index (CPI) report. Wall Street's main indexes closed modestly higher and US stock futures trade flat early Wednesday.

EUR/USD edged higher toward 1.1300 on the back of upbeat PMI data from the euro area and Germany on Tuesday but returned to the 1.1250 area early Wednesday. The pair stays dangerously close to 2021-lows that it set earlier in the week.

GBP/USD seems to have gone into a consolidation phase below 1.3400 following a three-day decline. European Commission Vice President Maros Sefcovic says that post-Brexit talks could drag into next year.

NZD/USD came under strong bearish pressure during the Asian trading hours on Wednesday and fell to its weakest level in more than a month near 0.6900. The Reserve Bank of New Zealand (RBNZ) hiked its policy rate by 25 basis points to 0.75% as expected. Commenting on the policy outlook, RBNZ Governor Adrian Orr said that they will take cautious steps and added that they can take their time following the decision to hike the cash rate.

USD/TRY gained more than 12% on Tuesday and skyrocketed to a new all-time high near 13.5. The Central Bank of the Republic of Turkey (CBRT) stays on the sidelines during the currency's meltdown.

USD/JPY reached fresh multi-year tops above 115.00 on rising US T-bond yields and fluctuates in a tight range in the early European session.

Gold suffered heavy losses and broke below the key $1,800 area on Tuesday. XAU/USD is currently posting small recovery gains above $1,790 but the near-term technical outlook seems to have turned bearish.

Cryptocurrencies: Bitcoin continues to fluctuate below $60,000 as investors await the next catalyst. India's cabinet will reportedly discuss cryptocurrency regulation later in the day. Ethereum is moving up and down in a narrow band 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.

GBP/USD flat lines around mid-1.3300s vs USD amid Iran tensions

The GBP/USD pair struggles to capitalize on last week's strong move higher and oscillates in a narrow band, around the 1.3350 area during the Asian session on Monday. Moreover, spot prices remain below a technically significant 200-day Simple Moving Average, warranting caution before positioning for an extension of the recent recovery from the 1.3140 zone, or the year-to-date low touched in June.

EUR/USD consolidates below mid-1.1400s as Hormuz risks support safe-haven USD

The EUR/USD pair kicks off the new week on a subdued note and oscillates in a narrow band below mid-1.1400s during the Asian session. Spot prices, however, remain within striking distance of a nearly two-week high, touched last Thursday, amid mixed fundamental cues.

Gold eases from two-week top as Hormuz risks support USD; remains near $4,200

Gold struggles to capitalize on its strength beyond $4,200 and retreats slightly from a two-week high touched during the Asian session on Monday. The US Dollar edges lower amid persistent geopolitical uncertainties stemming from tensions in the Strait of Hormuz, acting as a headwind for the bullion. However, receding Fed-hike bets might hold back USD bulls from placing aggressive bets and help limit the downside for the non-yielding yellow metal.

Week ahead: ISM services PMI and Fed Minutes to shake Fed hike bets

Dollar drops on NFP, but rate hike still expected by year-end. ISM services PMI and Fed minutes are the greenback’s next catalysts. RBNZ expected to raise rates, focus will be on forward guidance. ECB minutes, China CPI and Canada’s jobs report also on the agenda.

Why central banks are loading up on Gold during the current 30% correction

Gold has crashed from $5,500 to $4,000 in five months, marking a decline of almost 30% that has triggered widespread retail panic. However, this correction could present a significant opportunity, driven by an unprecedented market indicator: central bankers and the world's largest asset managers are aggressively buying.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.