In the forex market, the upcoming week anticipates limited activity due to a light economic calendar and holiday-thinned trading. Most platforms will be non-functional on Monday, potentially leading to false breakouts. Equities performed well, with the Dow Jones hitting all-time highs, while US Treasury yields fell to 3.90%, the lowest since July. The US Dollar Index (DXY) remained bearish below 102.00, influenced by risk appetite and lower yields. The week’s key indicator, Core PCE, rose 0.2%, below the expected 0.3%, contributing to the dollar’s decline. Next week’s US data includes home prices, jobless claims, and the Chicago PMI.
EUR/USD surpassed 1.1000, aiming to sustain this level, marking the highest weekly close in five months. GBP/USD saw modest gains but struggled above 1.2700 due to softer UK inflation. The Japanese Yen weakened after the Bank of Japan’s meeting, with USD/JPY ending below the weekly peak at 142.50. BoJ’s Summary of Opinion and economic data, including retail trade and industrial production, will be key. Canada, Australia, and New Zealand lack significant economic reports, with AUD/USD and NZD/USD posting gains. USD/CAD dropped below 1.3300, marking the lowest close since August.
Gold achieved its second-highest weekly close, hovering around Dollar 2,050. The bullish trend faces risks from a potential Fed easing repricing, with a rebound in US yields posing a threat. The forex landscape awaits crucial economic releases and central bank actions, with global dynamics steering price actions in the upcoming week.