Market Drivers – US Session, November 28

Mohamed Abdelhamid 29 November, 2023 1:13 am Commodities, Forex Market, Market Update

The US Dollar retreated across the board. The comments by Fed’s Christopher Waller stating that if inflation consistently declines, there is no reason to insist on keeping interest rates really high reinforced the negative momentum of the Greenback. Fed’s Mester will speak on Wednesday.

The US Dollar Index (DXY) broke below 103.00, falling to 102.60, the lowest intraday level since August 11. The 10-year US Treasury yield fell to 4.33%, the lowest since September 20. The Dow Jones reached its highest level since August, continuing the rally and adding another negative factor for the US Dollar.

Economic Data

The CB Consumer Confidence Index rose in November to 102.0 but after a downward revision to October figures from 102.6 to 99.1. The US S&P/Case-Shiller Home Price Index rose 3.9% YoY in September, slightly below the expected 4%. Data due from the US on Wednesday includes a new estimate of Q3 GDP growth. Later in the day, the Federal Reserve will release the Beige Book.

Key Developments

EUR/USD tested levels above 1.1000 and pulled back. The trend remains up, but a correction seems overdue. It will be a crucial day regarding economic data for the European Central Bank (ECB) as Spain and Germany will release inflation figures for November, with both countries expected to report a slowing in the annual inflation rate. Eurostat will release its Sentiment survey.

GBP/USD rose for the fourth consecutive day and reached levels above 1.2700 before pulling back. With technical indicators at overbought levels, like many currency pairs, some consolidation seems likely.

USD/JPY tumbled amid lower US Yields, falling to 107.50. The bearish pressure persists, and there is scope for further losses.

AUD/USD continued to edge higher and climbed to 0.6665 before pulling back. Risk appetite, lower yields, and higher commodity prices support the upside. The Australia Monthly Consumer Price Index is due, with the annual inflation rate expected to slow from 5.6% in September to 5.2% in October.

NZD/USD broke above the 200-day Simple Moving Average (SMA) and 0.6100, finding resistance around 0.6150. The bias is to the upside, with the RSI approaching 70 in the daily chart. The Reserve Bank of New Zealand (RBNZ) will announce its decision on monetary policy. No change in rates is expected. RBNZ expected to hold interest rate steady at 5.50% at November meeting

Gold accelerated to the upside and posted the highest daily close since May, around $2,040, boosted by the decline in US yields. Despite extreme readings, the positive momentum prevails, and XAU/USD is looking for a new equilibrium level. Silver rose to the $25.00 area.

During the Asian session, the Australian Monthly CPI is due. Additionally, the Reserve Bank of New Zealand will announce its decision on monetary policy. Later in the day, inflation figures from Spain and Germany will be closely watched. The US will report an updated estimate for Q3 GDP.

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