Here's what you need to know on Wednesday, November 27th.
of United States dollar (USD) Stabilizing after two days of volatility, the European U.S. dollar index was flat on Wednesday morning at just below 107.00. Ahead of the Thanksgiving holiday, the U.S. economic calendar is set to release some top data, including October personal consumption expenditures (PCE) price index and durable goods orders.
USD price this week
The table below shows the percentage change of the US dollar (USD) against major currencies this week. The US dollar was the weakest against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| 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% | |
| australian dollar | -0.36% | -0.90% | -0.82% | -2.14% | 0.29% | -1.12% | -1.59% | |
| new zealand dollar | 0.26% | 0.24% | 0.31% | -1.13% | 1.04% | 1.12% | -0.48% | |
| swiss franc | 0.73% | 0.71% | 0.78% | -0.77% | 1.55% | 1.59% | 0.48% |
The heat map shows the percentage change between major currencies. The base currency is selected from the left column and the quote currency is selected from the top row. For example, if you select USD from the left column and move along the horizontal line to Japanese Yen, the percentage change displayed in the box represents USD (base)/JPY (estimate).
A slight improvement in risk mood made it difficult for the US dollar to gain momentum during Tuesday's US trading hours. U.S. stock index futures were trading mixed early Wednesday, while the benchmark 10-year Treasury yield remained below 4.3%, sluggish from Tuesday's modest rise. In addition to the data releases above, the U.S. Department of Labor will release weekly new unemployment insurance claims and the U.S. Bureau of Economic Analysis will release its second estimate of annual gross domestic product (GDP) growth for the third quarter. .
During Asian trading hours, the Reserve Bank of New Zealand (RBNZ) announced it had cut its policy interest rate by 50 basis points (bps) from 4.75% to 4.25%. This decision was in line with market expectations. “If economic conditions continue to develop as expected, the Commission expects to be able to reduce the OCR further early next year,” the RBNZ said in a policy statement. Commenting on the policy outlook, RBNZ Governor Adrian Orr said the door remained open for a further 50bps rate cut in February. After wild swings in the immediate reaction to the RBNZ announcement; New Zealand dollar/US dollar It gained momentum and was seen trading in positive territory at the end, exceeding 0.5850.
euro/usd Tuesday ended the day largely unchanged, with no decisive move in either direction. Wednesday morning in Europe saw relatively calm price movements, fluctuating within a narrow range below 1.0500.
GBP/USD It lost momentum after testing 1.2600 for the second day in a row on Tuesday. The pair moves sideways above 1.2550 and the European session begins.
USD/JPY It came under bearish pressure on Tuesday, falling 0.7%. The pair continued to fall, ending the day at around 152.00, down more than 0.5%.
gold After falling towards $2,600 on Tuesday, it made a gradual recovery and ended the day with a modest gain. XAU/USD extended its rally early Wednesday and is trading near $2,650.
Frequently asked questions about inflation
Inflation measures the increase in the price of a representative basket of goods and services. Headline inflation is typically expressed as a percentage change on a month-over-month (MoM) and year-over-year (YoY) basis. Core inflation excludes more volatile components such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. Core inflation is the number that economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level (usually around 2%).
The Consumer Price Index (CPI) measures the change in the price of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-over-month (MoM) and year-over-year (YoY) basis. Core CPI is a central bank target that excludes volatile food and fuel inputs. If core CPI rises above 2%, interest rates will typically rise, and vice versa if it falls below 2%. A rise in interest rates is good for the currency, so a rise in inflation usually results in a rise in the currency. The opposite is true when inflation falls.
It may seem counterintuitive, but when a country's inflation rate is high, the value of its currency increases, and vice versa when its inflation rate is low. This is because central banks typically raise interest rates to combat rising inflation, which increases global capital inflows from investors looking for favorable places to park their money.
Previously, gold was an asset that investors looked to during times of high inflation because it maintained its value. Investors still often purchase gold as a safe-haven asset during times of extreme market turbulence, but this is not the case in most cases. . When inflation rises, central banks raise interest rates to counteract it. Rising interest rates are negative for gold because they increase the opportunity cost of holding gold as an interest-bearing asset or in a cash savings account. Conversely, lower inflation tends to be positive for gold as it lowers interest rates, making the bright metal a more viable investment option.
