Forex Today: Dollar vulnerable after worst week in months


Next week is expected to be quiet regarding economic data for the US following an exhaustive week of releases. The weekly Jobless Claims on Thursday and the University of Michigan Consumer Sentiment survey on Friday stand out as the week's highlights. In the following week, the Consumer Price Index is scheduled for release. The RBA will have a meeting, and China will release inflation data.

Here is what you need to know for next week: 

The US Dollar had its worst weekly performance in months following the Federal Open Market Committee (FOMC) meeting and the Nonfarm Payroll report. The Fed kept interest rates as expected, and the Nonfarm Payrolls rose by 150,000, below market expectations but still indicating a healthy labor market.

US Jobs data came in below expectations, hinting at a more balanced market and contributing to growing expectations that the Federal Reserve (Fed) is done with rate hikes. This increased risk appetite in Wall Street and weighed on the US Dollar. However, there may still be corrections and potential further declines, particularly if US Treasury yields continue to decline. Nevertheless, the fundamentals still favor the US Dollar, as US economic growth outperforms other economies. 

Next week, the economic calendar is quiet in terms of US data. The most relevant reports will be the weekly Jobless Claims and the University of Michigan Consumer Sentiment survey on Friday. After that, attention will turn to the Consumer Price Index (CPI), due on November 14, which is crucial for Fed officials and market expectations.

Geopolitical events will continue to have an important impact next week. Chinese inflation data, scheduled for release on Thursday, will be closely watched.

EUR/USD rose more than 150 pips during the week, boosted by a weaker US Dollar and breaking above the 55-day Simple Moving Average (SMA) on Friday. The economic outlook for the Euro area remains complicated. Next week, Eurostat will release the Producer Price Index for September on Tuesday and Retail Sales data on Wednesday.

The Bank of England's Monetary Policy Committee voted 6-3 to keep the cash rate unchanged at 5.25%, as expected. GBP/USD jumped on Friday towards 1.2400, reaching monthly highs, while EUR/GBP decisively broke below 0.8700, falling to 0.8665, the lowest level in two weeks. The UK will release Gross Domestic Product figures for the third quarter on Friday, as well as Industrial Production and trade data.

USD/JPY dropped for the third consecutive day on Friday, amid lower Treasury Yields. The weekly chart shows a reversal pattern that could anticipate further weakness ahead. The pair posted its lowest weekly close in a month, below 149.50. The Bank of Japan will release its Summary of Opinions on Thursday, including projections for inflation and economic growth.

USD/CAD plummeted on Thursday and Friday, falling from one-year highs near 1.3900 to 1.3650. The sharp reversal took place amid risk appetite and was driven by a weaker US Dollar. The Bank of Canada will publish the minutes of its last monetary policy meeting on Wednesday.

AUD/USD jumped from monthly lows to the highest level in weeks, surpassing the key resistance area around 0.6500. The pair closed the week above the 20-week SMA. The Reserve Bank of Australia (RBA) will announce its monetary policy decision on Tuesday. Market expectations lean towards a rate hike. Some analysts expect a 25 basis point rate hike, while others anticipate no change. The RBA could resume its tightening cycle after keeping the cash rate unchanged at 4.10% during four consecutive meetings. The rebound in inflation has firmly put a rate hike back on the table.

NZD/USD rose sharply, approaching the 0.6000 mark and the 20-week SMA. The short-term bias has changed dramatically, and now the pair looks set to rise further. The Reserve Bank of New Zealand (RBNZ) will release its inflation expectations report for the fourth quarter on Wednesday.

Gold surpassed $2,000 on Friday but failed to stay above. The risk outlook appears tilted to the upside, but the yellow metal is facing strong resistance. Silver soared from $22.65 to $23.20 on Friday, just enough to erase weekly losses.

 


Like this article? Help us with some feedback by answering this survey:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD: Strong resistance lies at 0.6300

AUD/USD: Strong resistance lies at 0.6300

The marked sell-off in the US Dollar allowed AUD/USD to regain strong upside traction and reach multi-day highs in the area just below the key 0.6300 barrier at the beginning of the week.

AUD/USD News
EUR/USD: Bulls need to clear 1.0400 on a convincing fashion

EUR/USD: Bulls need to clear 1.0400 on a convincing fashion

In line with the rest of the risk-associated complex, EUR/USD managed to regain marked buying pressure and flirted with the area of three-week highs around 1.0430 on Monday.

EUR/USD News
Gold remains focused on all-time highs

Gold remains focused on all-time highs

Gold stays in positive territory above $2,700 on Monday as the improving risk mood makes it difficult for the US Dollar to find demand. Markets await US President Donald Trump's speech at the inauguration ceremony.

Gold News
Solana Price Forecast: Are US traders dumping Bitcoin and XRP for SOL?

Solana Price Forecast: Are US traders dumping Bitcoin and XRP for SOL?

Solana (SOL) price stabilized near the $250 support level on Monday, having declined 10% from its all-time high over the last 24 hours.

Read more
GBP/USD stays defensive below 1.2200, awaits Trump 2.0

GBP/USD stays defensive below 1.2200, awaits Trump 2.0

GBP/USD struggles to gain traction and trades slightly below 1.2200 in the second half of the day on Monday. Markets' nervousness ahead of US President-elect Donald Trump's inauguration drag the pair lower despite a broadly weaker US Dollar. 

GBP/USD News
Trusted Broker Reviews for Smarter Trading

Trusted Broker Reviews for Smarter Trading

VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures