On Wednesday, hawkish Fed talks, geopolitical tensions, and volatile equities fueled demand for safe havens like the US Dollar and Gold. Early Thursday, risk sentiment stays weak amid China’s economic concerns, global trade war fears, and escalating conflicts involving Russia-Ukraine and Iran-Israel. Markets also await US Jobless Claims and Friday’s November PMIs, which add to the dicey momentum and favor haven assets.
With this, the US Dollar Index (DXY) fluctuates after ending a three-day losing streak. At the same time, Gold extends its rally to a fourth day, boosted by a decisive break above monthly resistance and the 50-day Exponential Moving Average (EMA).
Talk of the US Federal Reserve nearing a neutral rate contrasts with European Central Bank officials pushing for more rate cuts, putting pressure on EURUSD prices. ECB concerns over Eurozone growth risks and fiscal policies add to the bearish sentiment. EU-China tensions, the Russian war, and fears of a German recession further weigh on the Euro, leaving bears hopeful ahead of Friday's Eurozone and German PMI data for November.
The US Dollar’s strong comeback overshadowed positive UK inflation data, pushing GBPUSD towards its first daily loss in four days. Concerns over the UK's economic transition and challenges for the Bank of England (BoE) added to the downward pressure.
USDJPY stays strong as doubts grow over the Bank of Japan's ability to raise rates, amid political divisions and mixed data. Expectations of additional stimulus from Japan and China and rising yields support the Yen pair's gains.
Fears over China’s economic weakness and weak data from Australia and New Zealand weigh on AUDUSD and NZDUSD, despite the RBA’s "higher for longer" stance. Meanwhile, strong Canadian inflation couldn't drive USDCAD lower, as falling crude oil prices and a dovish Bank of Canada (BoC) outlook kept the pair elevated around the key technical support.
The US Dollar's strength, coupled with an increase in US crude oil weekly inventories, has exerted downward pressure on WTI Crude Oil, halting its two-day winning streak. At the same time, concerns over a potential supply crunch, driven by ongoing geopolitical tensions, are countered by OPEC+'s decision to delay an increase in oil supply, creating uncertainty for energy traders.
Gold continues to shine as a safe-haven asset, rising for the fourth consecutive day, breaking through a three-week resistance and surpassing the 50-day EMA. However, its upward momentum is facing challenges, including fears of weaker growth in China and mounting expectations for a slower pace of Fed rate cuts.
Reports of the Trump Administration planning to create a new crypto position in the White House have boosted Bitcoin (BTCUSD), pushing it to a fresh all-time high near $98,000. Meanwhile, Ethereum (ETHUSD) struggles to gain momentum, with traders favoring other altcoins due to weaker on-chain data and a broader preference for Bitcoin.
Traders will be watching closely for speeches from RBA Governor Michelle Bullock and policymakers from the BoE, ECB, and Fed. Key data to watch include Canadian price figures, US Jobless Claims, and the Philadelphia Fed Manufacturing Survey.
Given the relatively mild nature of these events, a major shift in the US Dollar's current strength is unlikely unless the outcomes are extreme. However, the Greenback's potential for further gains could face resistance ahead of Friday’s PMIs, which might boost Gold prices. EURUSD, GBPUSD, and USDJPY may not benefit from any US Dollar retreat due to their own bearish catalysts.
May the trading luck be with you!
