IFX Market Report: Friday 26th November 2021

The US Dollar maintained its recent run of form on Thursday as the US celebrated the Thanksgiving national holiday. The Greenback has impressively made gains of “around 2.8%” this month but after three consecutive days of upside the US Dollar Index (DXY) has moved down 0.007 from its “16-month high of 96.938 it reached late on Wednesday”. The Dollar was boosted on Wednesday when Minutes from the Fed’s November meeting showed that Fed members are expressing “concerns over rising inflation threats". The Minutes indicated that a "number of policymakers said they would be open to speeding up the taper of their bond-buying programme if high inflation held and move more quickly to raise interest rates”. Also helping the Greenback, data on Wednesday “showed that US jobless claims were at a 52-year low and consumer spending increased more than expected in October and inflation was rising”.

GBPUSD started Thursday at 1.3338 and made minor losses by the close, finishing at 1.3324. Sterling remained steady yesterday as markets anticipate a move from the Bank of England.

GBPEUR traded in a tight range on Thursday having fallen from the 1.19 handle. The pair opened at 1.1882 and closed at 1.1884.

EURUSD also was range-bound yesterday, trading just over the 1.12 mark. EURUSD started Thursday at 1.1224 and finished at 1.1211. The Euro’s losses are likely to continue, a surge in COVID-19 in “Germany and unusually high inflation rates are weighing on the consumer morale in Europe's largest economy” and acting as serious hindrance to the Single Currency.

On the data front, it’s a very quiet schedule. At 08:00 the European Central Bank President Christine Lagarde gave a speech, but this did little to influence markets.

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