US Dollar helped by caution ahead of major events
The US Dollar (USD) found some near-term demand on Wednesday, helped by the poor performance of Wall Street and hawkish comments from Federal Reserve (Fed) Governor Christopher Waller, who said o the Fed is not in a rush to cut interest rates, adding the job market is very soft,” and that current payrolls growth not good. Waller however, showed no concerns about inflation, as it remains “well anchored,” according to his words. The US Dollar Index (DXY) retreated from its weekly peak in the 98.60 area, trading mixed across the FX board, but overall weak.
The Sterling Pound fell against the Greenback, following the release of United Kingdom (UK) data. Headline Consumer Price Index (CPI) rose 3.2% over the year in November, down from 3.6% in October, but still well above the Bank of England (BoE) 2% target. GBP/USD trimmed most of its intraday losses ahead of the close, recovering from a fresh weekly low of 1.3311 and currently flirting with the 1.3400 mark. The BoE is scheduled to announce its monetary policy decision on Thursday, and market participants anticipate a 25 bps interest rate cut to 3.75%.
EUR/USD held above the 1.1700 mark and settled in its comfort zone around the 1.1750. The EU downwardly revised the November Harmonized Index of Consumer Prices (HICP) from a flash estimate of 2.2% to 2.1% YoY. The news came ahead of the European Central Bank (ECB) monetary policy announcement, scheduled also for Thursday. The ECB is widely expected to leave interest rates unchanged and to repeat its message of being in a “good place.” The focus will be on fresh economic projections, which include expectations for the next two years.
Adding to central banks’ announcements, the United States (US) will publish the November Consumer Price Index (CPI). The annualized index is foreseen at 3.1% higher than the previous 3%. Market players are quite sensitive to US data that can shape future Fed decisions.
Commodity-linked currencies were among the worst performers vs the USD, with the AUD and the CAD posting some intraday losses. The Japanese Yen (JPY) also weakened against the Greenback, while the Swiss Franc (CHF) managed to post some modest gains.
Gold retained its positive bias, but was unable to extend its weekly advance. XAU/USD is trading above the $4,330 mark at the end of the American session.
Source: FXstreet.com
