FX Today: US PCE data takes centre stage alongside the flash U-Mich gauge

Pablo Piovano FXStreet

The US Dollar (USD) struggled for direction amid the ongoing and intense bearish trend in place since late November. Rising bets for a rate cut by the Federal Reserve (Fed) next week and discouraging data have been keeping the Greenback under scrutiny as of late, fuelling its downside momentum.

Here’s what to watch on Friday, December 5:

The US Dollar (USD) navigated an inconclusive session on Thursday, with the US Dollar Index (DXY) briefly slipping back to the 98.80-98.70 band, or fresh multi-week troughs. The publication of the PCE will wrap up the calendar alongside Personal Income/Spending, the flash U-Mich Consumer Sentiment and Factory Orders.

EUR/USD briefly reached new two-month tops past the 1.1680 mark before receding marginally on the back of humble gains in the US Dollar. German Factory Orders are expected, followed by EMU’s final Q3 Employment Change and the third estimate of the Q3 GDP Growth Rate.

GBP/USD faded part of Wednesday’s strong advance, receding toward the 1.3340 zone after climbing to as high as the 1.3370 zone. The BBA Mortgage Rate and the Halifax House Price Index will close the weekly UK docket.

USD/JPY added to Wednesday’s pullback, hitting new two-week lows in the mid-154.00s. A busy calendar in Japan will feature the key Reuters Tankan Index, Current Account results, the final Q3 GDP Growth Rate, Bank Lending figures and the Eco Watchers Survey.

AUD/USD finally reclaimed the 0.6600 barrier and beyond for the first time since early October. The next key event in Australia will be the interest rate decision by the RBA on December 9.

WTI prices rose to weekly highs, briefly surpassing the key $60.00 mark per barrel as traders continued to closely follow developments on the geopolitical front.

Gold swung between gains and losses on Thursday, hovering around the $4,200 mark per troy ounce as the upbeat momentum in global stocks continued to undermine the demand for the safe-haven metal. Silver prices sold off markedly, revisiting three-day lows near $56.50 per ounce.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD struggles near 0.7150 as Fed hike bets and Middle East risks underpin USD

AUD/USD kicks off the new week on a weak note and hovers near Friday's low, around mid-0.7100s, as the US Dollar holds up on rising Fed rate-hike bets, bolstered by the US CPI. Furthermore, escalating Middle East tensions and clashes in the Strait of Hormuz underpin the safe-haven USD. However, hawkish RBA expectations could help limit deeper losses for the Aussie.

USD/JPY holds steady near mid-153.00s as traders await Fed/BoJ rate decisions

USD/JPY consolidates near a seven-month low touched last Tuesday as traders move to the sidelines ahead of the FOMC decision on Wednesday and the BoJ policy update on Friday. Meanwhile, a more hawkish repricing of the BoJ's normalization path supports the Japanese Yen, while rising Fed rate-hike bets and geopolitical risks underpin the US Dollar, leading to the pair's subdued price action at the start of the new week.

Gold consolidates above $4,300 as traders await Fed rate decision this week

Gold struggles to capitalize on Friday's modest bounce from sub-$4,300 levels and kicks off the new week on a subdued note as traders move to the sidelines ahead of a slew of central bank events. Meanwhile, the latest US inflation figures reaffirmed September Fed rate-hike bets and cap the non-yielding bullion. Moreover, escalating US-Iran tensions act as a tailwind for the safe-haven US Dollar, keeping XAU/USD bulls on the back foot.

Week ahead: Fed, BoJ and BoE decide amid inflation dilemma

A crucial central bank week looms for markets as both the Federal Reserve and Bank of Japan are under pressure from all sides, with their credibility at stake. The Bank of England looks set to have an easier ride, at least for now, while inflation releases will be watched too as war continues to rage in the Middle East.

CFTC Report: Japanese Yen reversal leads a broader positioning reset

The week in one sentence: Yen positioning swung back into net longs in the week to September 8, leading to a 103.0K-contract improvement. Canadian Dollar shorts also fell sharply, while Oil buying accompanied another price rise. Euro, Sterling and Swiss Franc positioning weakened despite firmer currencies, leaving those moves unconfirmed by speculative flows.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.