New York Forex: Dollar Heads for Worst Weekly Performance in Five Months

Deep News
11/29

The U.S. dollar edged lower on Friday, poised for its worst weekly performance since late June. Trading was subdued after the U.S. market was closed for Thanksgiving on Thursday. A multi-hour halt in CME Group trading also impacted market liquidity. The Canadian dollar led gains among G-10 currencies against the dollar after better-than-expected GDP data from Canada.

The Bloomberg Dollar Index dipped slightly, marking its fourth consecutive day of decline. The index is down 0.7% this week, on track for its worst weekly performance since June 27.

"Markets are currently pricing in a Fed rate cut in December, and only significantly positive data could support the dollar," wrote foreign exchange strategists at Crédit Agricole.

A technical failure at CME Group's data center halted futures and options trading, affecting multiple markets and trillions of dollars in contracts.

USD/CAD fell 0.4% to 1.3973, paring losses after hitting its lowest level since October 30.

Canada's economy rebounded strongly after initial trade war shocks. Data from Statistics Canada showed third-quarter GDP grew at an annualized rate of 2.6%, far exceeding economists' forecast of 0.5%.

"The initial drop was quite sharp, reflecting market focus on the upside surprise in the headline figure," said Bipan Rai, Managing Director at BMO. "But a closer look at the report details suggests the initial reaction may have been overdone."

USD/JPY slipped 0.1% to 156.12.

Tokyo inflation remained stable while industrial production unexpectedly rose, keeping expectations alive for a potential Bank of Japan rate hike in December or January.

EUR/USD rose 0.1% to 1.1603 as European CPI data showed diverging inflation trends, with the ECB's one-year inflation expectations ticking higher.

GBP/USD gained 0.1% to 1.3246.

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