The Greenback Bounces Back: What You Need to Know
After a bearish start to the week, the US Dollar Index (DXY) regained momentum on Tuesday, climbing to two-day highs above the 107.00 barrier. This upward movement was supported by a modest recovery in US yields and President-elect Donald Trump’s proposal to implement tariffs on imports from Canada, Mexico, China, and the EU.
Key Events for Wednesday, November 27:
- The PCE will be a significant event to watch, along with the usual weekly Mortgage Applications tracked by MBA.
- Other key data releases include the Chicago PMI, Durable Goods Orders, Personal Income and Spending, Wholesale Inventories, weekly Initial Jobless Claims, Pending Home Sales, and the EIA’s weekly report on US crude oil inventories.
Currency Movements:
- EUR/USD retreated back to the sub-1.0500 zone after the Greenback gained further strength.
- GBP/USD remained on the back foot following an initial move above 1.2600.
- USD/JPY declined to multi-day lows below 153.00 as the Japanese Yen appreciated.
- AUD/USD hit fresh multi-week lows amid US Dollar strength and weak commodity prices.
Commodity Markets:
- Geopolitical concerns eased, weighing on crude oil prices which fell to multi-day lows near $68.00.
- Gold prices saw marginal gains, reversing an early pullback towards $2,600 per troy ounce.
- Silver prices partially reversed a drop, with resistance at the $31.00 mark per ounce.
Analysis:
Despite initial bearishness, the US Dollar rebounded due to improved market sentiment driven by President-elect Trump’s tariff proposals. This movement indicates the potential impact of political decisions on currency markets. Investors should pay attention to upcoming economic data releases, as they can influence market movements and currency valuations.