Market sentiment is weak on Friday, driven by concerns over a potential US government shutdown, China’s plunging bond yields, and trade tensions with the US.
Geopolitical risks and caution ahead of the US Core PCE Price Index also weigh the risk appetite.
The US Dollar rises on positive Q3 GDP data and lower jobless claims, supporting expectations for slower rate cuts in 2025. This strengthens the Greenback, putting pressure on EURUSD, while GBPUSD hits a seven-month low ahead of UK retail sales.
USDJPY rises amid potential Japanese intervention, and Antipodean currencies suffer from China-related concerns and weak commodity prices.
Gold lacks upward momentum; crude oil extends losses, while equities drift lower. Cryptocurrencies continue their pullback as traders await more clarity about Trump-led optimism.
EURUSD stays near its yearly low, pressured by a stronger US Dollar, weak EU data, and political turmoil in Germany and France. ECB's dovish stance adds to the downside risk, although market inactivity limits further declines.
GBPUSD hits a fresh low since May, weighed down by the Bank of England’s dovish hold, weak UK data, and caution ahead of November retail sales.
USDJPY retreats from a five-month high, snapping a two-day winning streak as Japan’s intervention talks and positive inflation data weigh on the pair.
AUDUSD and NZDUSD reverse their bounce as concerns about China’s economy, trade tensions, and geopolitical issues with Taiwan hurt the Antipodeans. USDCAD rises as softer oil prices and dovish Bank of Canada concerns reverse Thursday's retreat, especially amid Canada's political turmoil.
Gold remains mildly supported but struggles to build momentum, weighed down by a strong US Dollar, hawkish Fed expectations, and China-related concerns.
Crude oil extends its losses for a fifth day, impacted by fears of slowing demand in China, higher OPEC+ output, and the G7’s failure to control Russian oil exports.
Bitcoin (BTCUSD) drops for the third straight day to a three-week low, while Ethereum (ETHUSD) extends its losing streak, as traders liquidate long positions due to hawkish Fed concerns and lack of major positive news from the crypto sector.
After a week of heavy volatility, Friday's trading could be muted unless upcoming data or events cause surprises. Key releases include the UK Retail Sales for November, the BoE Quarterly Bulletin, and Eurozone Consumer Confidence for December, which may influence momentum traders. However, all eyes will be on the US Core PCE Price Index, the Fed’s preferred inflation gauge.
While UK and EU data may not reverse recent losses for GBPUSD and EURUSD, the US inflation data could help the US Dollar extend its gains, especially with the Fed signaling slower rate cuts in 2025. This could pressure gold till it remains below the $2,613-20 resistance.
Further, USDJPY could continue its upward momentum whereas Crude oil, Antipodeans, and cryptocurrencies face limited recovery potential unless the US Dollar weakens. Equities are also likely to end the week lower due to hawkish Fed expectations and geopolitical concerns.
May the trading luck be with you!
