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Forex today: a terrible day for the US dollar ahead of Thanksgiving holidays

As the US closes for Thanksgiving holidays, last minute activity was strongly negative day for the dollar on Wednesday in the FX space with the DXY down to the lowest levels in five weeks -0.75% at 93.339 during the time of writing within a range of between 93.307 - 93.962.

Ahead of the release of the dovish FOMC minutes, the greenback was already on the backfoot, drifting lower from 93.94 in Asia and to 93.74 in London and then from 93.90 tops for the NY shift early and sliding with velocity to aforementioned lows on a combination of negative factors for the dollar. US rates were lower and US data disappointed with a big miss in US Durable Goods data and a slide in University of Michigan survey. Moreover, this was in line with Yellen’s remarks and confirmed that the inflation outlook remains soft reinforcing the gradual outlook for Fed policy. Meanwhile, the yield on the US 10-yr note eased 2bps to 2.234%. 

EUR/USD rallied from a low of 1.1735 and away from the supporting 200 hourly SMA, making a session high in NY of 1.1827. GBP/USD was a strong performer as well, despite Brexit concerns addressed in the UK budget forecast of slower growth. Cable ended at 1.3324 highs for the week. USD/JPY made a low of 111.14, the lowest level since 17th Sep, (despite higher stocks and US rates, note Swissy also well bid). As for the antipodeans, AUD, (copper supporting), was bid to 0.7618 and extending the minor recovery while the Kiwi move din on the 21-D SMA at 0.6886, up from 0.6820 lows. Gold finished higher to $1,294.86 and WTI moved to YTD highs at $58.10 as Saudis push for the nine-month extension to the production deal.

Key notes:

  • Gold adds to gains above $1290 as greenback weakens after FOMC minutes.
  • FOMC minutes: Participants felt an interest rate increase was warranted in near-term.
  • Qatari OilMin: Extending OPEC agreement would help stabilize oil market.
  • US Dollar plummets to fresh weekly lows below 93.40 ahead of FOMC minutes.

 

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