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MTrading Team • 2023-11-24

EURUSD struggles to cheer easing economic fears, sluggish US Dollar

EURUSD struggles to cheer easing economic fears, sluggish US Dollar

Traders appear slightly positive on early Friday as recently upbeat PMIs join receding geopolitical fears surrounding Israel. Also, the previously released downbeat prints of the US Durable Goods Orders and the chatters suggesting no more rate hikes from the Fed also underpin the market’s cautious optimism, which in turn pushes the US Dollar towards the second weekly loss. Even so, the market’s anxiety ahead of the US PMIs for November and the holiday mood in the US challenge the Greenback bears.

With this, the EURUSD and GBPUSD edge higher whereas the USDJPY snap a three-day winning streak. That said, Brent Oil prints the first daily gain in three while the Gold Price extends the previous day’s rebound towards posting a two-week uptrend. It should be noted that the USDCAD, AUDUSD and USDCHF appear mostly unchanged while NZDUSD rises the most versus the US Dollar among the G10 currency pairs.

On a different page, the Asia-Pacific shares grind higher after the Wall Street’s upbeat close before Thanksgiving. Further, BTCUSD appears challenging the five-week uptrend but the ETHUSD reverses the previous weekly loss.

Given the Black Friday-linked short trading session and a light calendar, the market may witness a lack of participation while allowing the traders to continue the weekly trend.

Following are the latest moves of the key assets:

  • Brent oil rises for the first time in three days, mildly bid near $81.70 by the press time.
  • Gold price remains indecisive near $1,993 while bracing for a two-week uptrend.
  • USD Index struggles for clear directions near 103.75 but stays under pressure on a weekly basis.
  • Asia-Pacific stocks edged higher while equities in Europe and the UK begin the day with mild losses.
  • BTCUSD and ETHUSD both print mild gains to around $37,300 and $2,070 at the latest.
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Mixed mood fails to help US Dollar…

The start of a four-day ceasefire between Israel and Hamas joins recently firmer activity data from the Eurozone, the UK and Germany to allow the global growth optimists to retake control. However, the increasing acceptance of the US soft landing and economic fears about China prod the market’s optimism amid a dull Friday.

The HCOB upwardly revised its German economic forecasts for Q4 2023 after upbeat PMIs from the bloc’s powerhouse. That said, Germany’s Manufacturing, Services and Composite PMIs for November all came in better than forecasts and prior readings despite being below the 50.0 level. On the same line, the first readings of November’s Eurozone PMIs and the UK’s activity data also came in firmer but below 50.0, and tamed fears of witnessing a longer recession in the old continent.

Additionally, European Central Bank (ECB) policymaker and Bundesbank Chief Joachim Nagel said, “Still cannot be sure if we have reached a peak in rates,” while ECB Governing Council member Pierre Wunsch rejected the need for more rate hikes. It should be noted that the ECB Accounts for the latest monetary policy meeting suggested all members agree to maintain interest rates at current levels. Furthermore, the Bank of England (BoE) rate cut bets pared back after the UK PMIs and comments from the UK Chancellor while publishing the Autumn Statement.

On a different page, China President Xi Jinping pushes more banks to ease the pain of the real-estate sector but the odds of witnessing more bankruptcies and softer demand due to the slightly offbeat economic activity challenge the optimism about the Dragon Nation.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

German IFO sentiment data, US PMIs in focus

Germany’s IFO sentiment data for November and the US PMIs will entertain the traders but a short trading session in the US will restrict momentum on Friday as Wall Street and the US bond markets will close early. Hence, the market appears all set to end the week on a positive side and can keep pushing the Greenback towards the south.

May the trading luck be with you!