USD correction driven by Fed dovishness – ING

FXStreet Insights Team FXStreet

This week’s US Dollar (USD) pullback reflects Fed-driven rate expectations rather than geopolitical shifts, while thinner Thanksgiving liquidity may set the stage for potential USD/JPY intervention, ING's FX analyst Francesco Pesole notes.

Yen outperforms high-beta peers

"As discussed yesterday, we believe this week’s dollar correction has more to do with a convergence towards lower rates following the dovish Fed's repricing, rather than any geopolitically driven rotation away from safe havens. The outperformance of the yen relative to a high-beta European currency like SEK is a clear testament to that."

"US markets are closed for Thanksgiving and liquidity conditions should be considerably thinner. That could be an attractive environment for Japanese authorities to intervene in USD/JPY. However, there may still be a preference to intervene after a USD-negative data event, and the stall in the pair may have removed some sense of urgency."

"The dollar remains somewhat expensive against G10 currencies, but given the size of this week's correction and limited room for further dovish repricing before some more data comes in, we are switching to a neutral bias on USD for this Thanksgiving holiday."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.