Here’s what you need to know on Wednesday, November 27:
He US dollar (USD) stabilizes after two days of volatile action, with the USD Index moving sideways slightly below 107.00 in the European morning on Wednesday. Ahead of the Thanksgiving holiday, the US economic calendar will include several high-level data releases, including the Personal Consumption Expenditure (PCE) Price Index and Durable Goods Orders for October.
US Dollar PRICE This Week
The table below shows the percentage change of the US Dollar (USD) against major currencies this week. US dollar was the weakest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.61% | -0.36% | -1.31% | 0.80% | 0.36% | -0.26% | -0.73% | |
| EUR | 0.61% | 0.08% | -1.32% | 0.81% | 0.90% | -0.24% | -0.71% | |
| GBP | 0.36% | -0.08% | -1.40% | 0.74% | 0.82% | -0.31% | -0.78% | |
| JPY | 1.31% | 1.32% | 1.40% | 2.15% | 2.14% | 1.13% | 0.77% | |
| CAD | -0.80% | -0.81% | -0.74% | -2.15% | -0.29% | -1.04% | -1.55% | |
| AUD | -0.36% | -0.90% | -0.82% | -2.14% | 0.29% | -1.12% | -1.59% | |
| NZD | 0.26% | 0.24% | 0.31% | -1.13% | 1.04% | 1.12% | -0.48% | |
| CHF | 0.73% | 0.71% | 0.78% | -0.77% | 1.55% | 1.59% | 0.48% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
The modest improvement in risk sentiment made it difficult for the USD to gain strength during US trading hours on Tuesday. Early on Wednesday, US stock index futures are trading mixed, while the 10-year US Treasury yield struggles to consolidate Tuesday’s modest gains and remains below 4.3%. . In addition to the data releases mentioned above, the US Department of Labor will release weekly initial jobless claims and the US Bureau of Economic Analysis will announce its second estimate of annualized Gross Domestic Product growth ( GDP) of the third quarter.
During Asian trading hours, the Reserve Bank of New Zealand (RBNZ) announced that it reduced the policy rate by 50 basis points (bps) to 4.25% from 4.75%. This decision was in line with market expectations. “If economic conditions continue to evolve as projected, the committee hopes to be able to further reduce the OCR early next year,” the RBNZ said in its policy statement. Speaking on the policy outlook, RBNZ Governor Adrian Orr noted the door remains open for another 50bps rate cut in February. After fluctuating wildly with the immediate reaction to the RBNZ announcements, the NZD/USD gained traction and was last seen trading in positive territory above 0.5850.
He EUR/USD failed to move decisively in either direction on Tuesday and closed the day virtually unchanged. The pair remains relatively calm in the European morning on Wednesday and fluctuates in a narrow band below 1.0500.
He GBP/USD lost traction after testing 1.2600 for the second day in a row on Tuesday. The pair moves sideways above 1.2550 as the European session begins.
He USD/JPY was under downward pressure on Tuesday and fell 0.7%. The pair continues to push lower and was last seen losing more than 0.5% on the day around 152.00.
He Gold recorded a modest recovery after falling towards $2,600 on Tuesday and ended the day with small gains. XAU/USD extends its bounce early on Wednesday and is trading near $2,650.
Inflation FAQs
Inflation measures the rise in prices of a representative basket of goods and services. General inflation is usually expressed as a month-on-month and year-on-year percentage change. Core inflation excludes more volatile items, such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the target level of central banks, which are mandated to keep inflation at a manageable level, typically around 2%.
The Consumer Price Index (CPI) measures the variation in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage of inter-monthly and inter-annual variation. Core CPI is the target of central banks as it excludes food and fuel volatility. When the underlying CPI exceeds 2%, interest rates usually rise, and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually translates into a stronger currency. The opposite occurs when inflation falls.
Although it may seem counterintuitive, high inflation in a country drives up the value of its currency and vice versa in the case of lower inflation. This is because the central bank will typically raise interest rates to combat higher inflation, attracting more global capital inflows from investors looking for a lucrative place to park their money.
Gold was once the go-to asset for investors during times of high inflation because it preserved its value, and while investors often continue to purchase gold for its safe haven properties during times of extreme market turmoil, this is not the case. most of the time. This is because when inflation is high, central banks raise interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity cost of holding Gold versus an interest-bearing asset or placing money in a cash deposit account. On the contrary, lower inflation tends to be positive for Gold, as it reduces interest rates, making the shiny metal a more viable investment alternative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
