Market sentiment remains uncertain early Thursday as month-end consolidation and the US Thanksgiving holiday keep trading subdued. Mixed US economic data and ongoing geopolitical concerns, including trade war tensions, add to the indecision.
US Durable Goods Orders and Chicago PMI fell short of expectations on Wednesday. However, stronger-than-expected Core PCE Price Index, Q3 GDP revision, and an improved Goods Trade Balance provided some optimism.
Amid these moves, the US Dollar Index (DXY) saw its sharpest daily drop in three months, yet gold and crude oil prices stayed under pressure. Meanwhile, major currencies and Antipodeans inched closer to weekly gains against the Greenback.
Despite concerns over a looming trade war with the US and weak EU/German data, EURUSD looks poised to break its three-week losing streak. Support comes from European Central Bank (ECB) President Christine Lagarde's willingness to negotiate on US trade tariffs and Board member Isabel Schnabel's view of limited room for further rate cuts.
While Germany’s GfK Consumer Confidence fell to its lowest since May, earlier data from the Eurozone and Germany eased fears of a deep recession and worsening employment conditions.
The US Dollar’s retreat struggles to lift GBPUSD as UK service sector sentiment hit a two-year low, according to the Confederation of British Industry (CBI) survey. Meanwhile, USDJPY is set for its largest weekly drop since early September, ending a two-week rally. Signals of rising inflation and wages in Japan hint at more Bank of Japan (BoJ) rate hikes. Yen’s safe-haven appeal and Tokyo’s readiness for market intervention to defend the currency add further pressure on USDJPY.
AUDUSD trims weekly losses, supported by stronger-than-expected Capex data, challenging the dovish outlook for the Reserve Bank of Australia (RBA). Similarly, USDCAD retreated from its yearly high, despite weaker Crude Oil prices, as Canadian data eased concerns about a dovish Bank of Canada (BoC).
On the other hand, NZDUSD looks set for a weekly gain, even after the Reserve Bank of New Zealand's 0.50% rate cut. The rebound is likely driven by positive RBNZ statements and economic optimism from Assistant Governor Karen Silk.
Gold buyers struggle to gain traction amid a more hawkish Fed outlook and concerns over a soft landing for the US economy. Additional pressure on XAUUSD comes from month-end consolidation, worries over China, and a quiet economic calendar.
Crude oil also faces downward pressure from China-related concerns, despite a significant draw in US crude inventories.
As a result, both gold and crude oil appear negative for the week, even though gold posted slight gains in the last two days.
Bitcoin's (BTCUSD) inability to break past the $100K mark led to profit-taking and a slowdown at the end of the month, suggesting a weekly loss. As a result, money shifted towards Ethereum (ETHUSD), helping it stay stronger for the week despite lacking major positive news.
With US markets closed for Thanksgiving, momentum will slow on Thursday, especially with a quiet economic calendar elsewhere. However, Germany's November inflation data and Eurozone sentiment figures could spark interest for traders. Month-end consolidation may weaken the US Dollar, helping EURUSD rise if EU/German data are positive. The GBPUSD has limited upside due to UK concerns, while the USDJPY could dip further. Gold and oil might continue their recent pullbacks, and the Antipodean currencies could post gains if the Greenback remains weak. Cryptocurrencies might stay stronger, while equities could see profit-taking.
May the trading luck be with you!
