Key Updates for December 5th
Here’s a quick overview of the current economic scene as we head into Friday.
After showing resilience against competitors on Thursday, the United States dollar (USD) is having difficulty drawing in buyers this early Friday. Later on, the U.S. Bureau of Economic Analysis (BEA) is set to release the personal consumption expenditure (PCE) price index for September, which is the Federal Reserve’s favored inflation indicator. Toward the end of U.S. trading, investors will also be keeping an eye on the University of Michigan’s Consumer Confidence Index for December.
USD Performance This Week
This week’s movements show that the US dollar has underperformed against major currencies, particularly the Australian dollar, where it was weakest.
The table below illustrates the percentage change of the US dollar against various currencies.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.51% | -0.80% | -0.97% | -0.20% | -1.15% | -0.66% | -0.06% | |
| EUR | 0.51% | -0.28% | -0.45% | 0.32% | -0.64% | -0.14% | 0.46% | |
| GBP | 0.80% | 0.28% | 0.08% | 0.60% | -0.36% | 0.14% | 0.74% | |
| JPY | 0.97% | 0.45% | -0.08% | 0.77% | -0.21% | 0.30% | 0.90% | |
| CAD | 0.20% | -0.32% | -0.60% | -0.77% | -1.01% | -0.46% | 0.14% | |
| AUD | 1.15% | 0.64% | 0.36% | 0.21% | 1.01% | 0.50% | 1.10% | |
| NZD | 0.66% | 0.14% | -0.14% | -0.30% | 0.46% | -0.50% | 0.60% | |
| CHF | 0.06% | -0.46% | -0.74% | -0.90% | -0.14% | -1.10% | -0.60% |
The heat map captures the percentage shifts between major currencies, where the left column indicates the base currency and the top row shows the quote currency.
On Thursday, the US dollar gained strength due to encouraging economic signs. Challenger Gray & Christmas reported a significant drop in planned layoffs, down 53% from October to 71,321 in November. Moreover, new jobless claims dropped to 191,000 from 218,000 the week prior, surpassing expectations. Still, the likelihood of the Federal Reserve cutting rates in December remains stable at about 90%, resulting in a relatively weak recovery for the dollar. On Friday morning in Europe, the U.S. dollar index remains underwhelming, staying below 99.00.
The USD/CAD pair closed slightly higher on Thursday, but by Friday morning, it retreated to the 1.3950 level. Statistics Canada plans to release the November employment figures later today, with expectations pointing to a slight uptick in unemployment to 7% from 6.9% the previous month.
Japanese Finance Minister Satsuki Katayama mentioned on Friday that interest rates are influenced by “various factors,” emphasizing the government’s commitment to overseeing market conditions and ensuring fiscal sustainability in their budgeting. After a slight decline on Thursday, the USD/JPY pair continued its downward trajectory on Friday, concluding the day at 154.65, down 0.3%.
The EUR/USD saw a drop of about 0.25% on Thursday, breaking an eight-day winning streak. However, it regained some momentum in the European morning, trading above 1.1650. Eurostat is expected to release revised figures for third-quarter employment and GDP later today.
After a sharp rise on Wednesday, the GBP/USD corrected slightly on Thursday, ending the day with a minor loss. It has stabilized around 1.3350 early Friday.
Gold struggled to find direction on Thursday, finishing a second consecutive day of mild fluctuations. Early Friday, XAU/USD saw a slight increase, trading above $4,200.
