Daily Currency Update

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A Shortened Trading Week in the US May Bring Volatility.

USD - United States Dollar

Price action for USD this week will be hampered by Thursday Thanksgiving holiday and long weekend. While the back and forth between trade delegates drive direction, we could see some increased volatility in thin trading lines come to the end of the week, especially if key inflation data due Wednesday misses the mark. Markets are likely to continue exhibiting low conviction amid rising US-China deal uncertainties. Two-way risks on US-China headlines and a lack of new signals from global data and monetary policies could keep markets trading in a narrow range for the short term. The US market seems to be on a “wait and see” mode, after two weeks of public hearings on Donald Trump Impeachment saga plus Trump himself refusing to confirm if he’ll sign a bill, passed by the Congress, on backing Hong Kong democracy protesters.
Market participants will have a ton of US economic data to digest tomorrow and Wednesday before Thanksgiving. Stock futures are pointing to a positive open as Chinese controlled state media says both US and China are very close to agreeing on the "Phase One" trade deal. Pro-democracy parties in Hong Kong won local elections taking control of 85% of the 452 seats available.

Key Movers

Price action for USD this week will be hampered by Thursday Thanksgiving holiday and long weekend. While the back and forth between trade delegates drive direction, we could see some increased volatility in thin trading lines come to the end of the week, especially if key inflation data due Wednesday misses the mark. Watch for fluctuation in USD/JPY on the back of risk trends.
Sterling remains beholden to the election and subsequent Brexit outcomes, finding support through the end of last week as Johnson’s conservative look further cement their lead in the polls. Opening this morning just below 1.29, we anticipate the GBP will fluctuate between 1.27 and 1.31 in the point up to the December 12th election.
The Euro could test the lower end of recent ranges this week, having missed on key manufacturing PMI data last week. With little offered from new ECB head Christine Lagarde in her maiden address we can only expect the ECB will maintain it current path of QE and accommodative monetary policy. Concerns over lackluster growth and stagnant inflation will require a persistent and ongoing stimulus action. A break below the psychological 1.10 mark could signal a downturn and move toward 1.0950.

Expected Ranges

EUR/USD: 1.1005 - 1.1032 ▼

GBP/USD: 1.2840 - 1.2885 ▲

USD/CAD: 1.3285 - 1.3315 ▲

AUD/USD: 0.6772 - 0.6799 ▼

NZD/CAD: 0.6394 - 0.6428 ▼