USD weakens heading into holiday weekend
Daily Currency Update
The US Dollar Index (DXY) was down heading into the last trading session before the holiday weekend. US treasuries were also down on the back of lower-than-expected inflation data and a jump in demand for goods. The Personal Consumption Expenditure (PCE) Inflation index for November showed inflation was up 2.6% year-over-year. This was lower both than the expected 2.8% and the previous 2.9%. This could play into more bets that the Federal Reserve is not only done raising rates but could start pulling back in the spring. At the same time, orders for higher priced goods were up more than expected last month. Durable goods orders for November were up 5.4% from the previous month, more than twice the expected 2.2%.Key Movers
The euro continued this week’s trend of making gains against most majors, including the USD. The euro gained more than a penny against the greenback since Monday as investors reset expectations for Eurozone rate cuts as the European Central Bank (ECB) gets inflation under control.The Canadian dollar was flirting with key support levels last seen at the end of July. The Loonie is being driven by rebounding oil and a generally weakening US dollar. The Canadian economy though did hit a snag this morning with the release of October’s Gross Domestic Product (GDP) data which showed that there was 0% growth in the economy as opposed to an expectation of a 0.2% bump. This was the third straight month showing no growth in Canada, drawing concerns that there could be a drop to the negative in the new year. Oil continued to gain as pirate attacks in the Red Sea continued to force cargo ships, including tanker traffic to take longer, more expensive routing. These necessary moves are causing delays in getting goods to port as well as increasing shipping costs. West Texas Intermediate (WTI) oil price was over $74 a barrel this morning.
Expected Ranges
- EUR/USD: 1.097 - 1.1083 ▲
- GBP/USD: 1.2648 - 1.2754 ▲
- AUD/USD: 0.6772 - 0.6851 ▲
- USD/CAD: 1.3265 - 1.3363 ▼