Thanksgiving of the US Dollar

This article was written by Ashwin Peswani, Regional Director of . 

With robust Durable Goods Orders and an upbeat statement from the FOMC minutes in November, the USD managed to extend its run north on the Thanksgiving holiday as investors more or less remained assured of a December Fed rate-hike.

Elsewhere, the EUR dipped with its regional political trauma while the GBP also had to trim a bit of its previous gains and the JPY plunged heavily with continuous liquidation in safe-havens.

Further, the AUD remained strong as increasing iron ore demand helped this commodity currency, but the NZD and CAD lowered due to weakening prices of the commodities of the stronger USD. Additionally, crude remained tense ahead of next week’s OPEC meeting as some traders are afraid that the production-freeze deal may not be signed because of Iran and Iraq.

After the holiday, Friday trading is a bit light during the earlier sessions as some traders haven’t yet finished Thanksgiving and may avoid trading during the last trading day of the week.

Even with a less active market, the greenback witnessed bit of pullback with the rise in the AUD and NZD. Additionally, the GBP and the JPY couldn’t strengthen against the greenback and the CAD kept bearing the burden of weak crude prices.

Moving forward, a second estimate of UK GDP, US Trade Balance and Services PMI are some of the scheduled data-points to propel market moves. Amongst them, UK GDP is less likely to help the GBP while the US details may continue adding some more weight for greenback bulls.

As this is the last day of the week ahead of the important week after the Thanksgiving holiday, there is a high chance that light trading will continue. However some pullbacks can’t be denied for the USD which has already registered noticeable gains.

Cheers and safe trading.


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