Forex Today: US Dollar takes advantage of a dismal market mood

Valeria Bednarik FXStreet

What you need to take care of on Wednesday, December 7:

Financial markets remained risk-averse, helping the US Dollar to advance on Tuesday. The American currency shed some ground throughout the first half of the day, but gathered momentum after Wall Street’s opening as US indexes fell for a fourth consecutive session.

The American Dollar finished the day at fresh weekly highs, particularly against its high-yielding rivals. The EUR/USD pair hovers around 1.460, while GBP/USD trades in the 1.2140 price zone.

Financial markets reflect increased uncertainty about the US Federal Reserve’s future actions. The central bank has hinted at an easing pace of quantitative tightening starting as soon as this month, despite economic resilience and signs of easing inflation. Both, policymakers and investors fear the aggressive pace of tightening will result in a long-lasting recession.

Meanwhile, European Central Bank Governing Council member Constantinos Herodotou said the central bank would hike rates again but warned they are near the neutral rate

Tensions between Europe and Russia escalate, as the latter is considering reducing oil production while setting a floor for oil sales in response to the G-7 decision to cap prices.

Crude oil prices were sharply down, with the barrel of WTI currently changing hands at $74 per barrel. The USD/CAD pair surged towards the 1.3660 price zone, where it currently trades.

The AUD/USD pair ended the day around 0.6680, following the lead of stocks and despite a hawkish RBA. Safe-haven CHF and JPY trimmed early gains vs the dollar and the pair ended the day pretty much unchanged.

Spot gold attempted to recover ground but closed Tuesday unchanged at around $1,770 a troy ounce.

Australia will publish its Q3 Gross Domestic Product early on Wednesday, and the economy is expected to have grown at an annualized pace of 6.3%.

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD languishes near weekly low, below 1.3600 as USD bulls await Warsh's speech

The GBP/USD pair is seen consolidating near the lower end of its weekly range, below the 1.3600 mark, during the Asian session. The downside, however, remains cushioned as traders look for more cues about the US Federal Reserve's interest rate path before placing fresh directional bets.

EUR/USD holds gains above 1.1650 on hawkish ECB bias

The EUR/USD pair edges higher to around 1.1655 during the early Asian session. A hawkish stance of the European Central Bank provides some support to the Euro against the US Dollar. Traders will closely monitor the Jackson Hole Symposium event later on Friday for fresh impetus.

Gold keeps sight of $4,700 ahead of Fed Warsh’s speech

Gold is making another run to retest 15-week highs of $4,697 early Thursday. Gold traders are taking advantage of an upbeat mood-led US Dollar (USD) retreat, looking past hot US core Personal Consumption Expenditures (PCE) Price Index data for July. Renewed USD weakness offers the much-needed boost to Gold, following Wednesday’s pullback from near the $4,675 neighbourhood.

Bitcoin holds at $78,000 amid US PCE surprise – SPX6900, VeChain rally

The broader cryptocurrency market maintains a constructive tone, with Bitcoin (BTC) sustaining gains above $78,000 on Thursday. The US July Personal Consumption Expenditures (PCE) Price Index inflation came in higher than expected on Wednesday, suggesting that inflation remains elevated. SPX6900 (SPX) and VeChain (VET) recorded double-digit gains over the last 24 hours, emerging as top performers.

South Korean Won gains on back-to-back BoK interest rate hikes

The South Korean Won trades higher against the US Dollar on Thursday, with USD/KRW falling 0.3% to near 1,380 during the Asian trading session. The pair revisits its 11-month low as back-to-back interest rate hikes by the Bank of Korea have strengthened the currency.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.