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

Deep News
Nov 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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