Dollar Pares Gains to Offer Relief to Commodities

It’s been a slow start to trading on Friday, with yesterday’s bank holiday in the US weighing heavily on volumes and a severe lack of news flow leaving markets void of any significant catalysts.

While today is not a bank holiday, trade is likely to remain very thin with many in the US opting to extend the Thanksgiving holiday into the weekend. The lack of scheduled economic data and events today is unlikely to help matters, with the only notable releases being the services and composite PMI figures shortly after the open. Both of these are expected to be relatively unchanged so may well just pass by without attracting too much attention, unless of course the numbers deviate significantly from expectations.

USD/CAD – Canadian Dollar Yawns After US Thanksgiving Break

It would appear traders are using this period of light trade to lock in some profits on the recent dollar surge, with the greenback off around a third of one percent today. The rally has been relentless since Donald Trump’s election victory which quickly prompted a repricing of interest rate expectations as markets prepare for the President-elects bold spending plans.

The dollar’s decline today is giving commodities some welcome relief, particularly precious metals such as Gold which has come under substantial pressure in recent weeks. Having broken below $1,200 on Wednesday, Gold is looking quite bearish and very susceptible to a hawkish Fed outlook next month. We may continue to see it correct today but it’s likely to run into some resistance around $1,200 should it even get that far.

Economic Calendar

OANDA fxTrade Advanced Charting Platform

U.S Dollar Stumbles, But Does Not Fall

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam