The U.S. dollar weakened against major trading partners early Wednesday as markets prepared for a slew of data releases ahead of the Thanksgiving holiday. Among the day’s highlights is the October core PCE deflator, expected to show a 0.3% month-on-month increase. Analysts caution that a higher than expected reading could challenge the assumption that the Federal Reserve will cut rates in December.
Despite the current pressure, analysts at ING remain bullish on the dollar. ING’s Chris Turner noted that today’s data—including the second estimate for Q3 GDP (expected at 2.8% annualized)—will shape market sentiment before the holiday-shortened week concludes.
Key Forex Movements on Wednesday
- EUR/USD: Rose to 1.0527 from 1.0481 at Tuesday’s close.
- GBP/USD: increased to 1.2610 from 1.2558 at the prior close.
- USD/JPY: fell to 151.47 from 153.08, reflecting growing expectations of a rate hike by the Bank of Japan.
- USD/CAD: Slipped to 1.4058 from 1.4066.
Market Highlights and Upcoming Events
- The Bank of England and European Central Bank are set to hold their next meetings on Dec. 19 and Dec. 12, respectively.
- Japan’s consumer price data, scheduled for Thursday, could impact expectations for the Bank of Japan’s Dec. 18–19 meeting.
- The Bank of Canada is set to meet on Dec. 11, with no significant Canadian data scheduled for today.
Meanwhile, the U.S. Mortgage Bankers Association reported a jump in mortgage purchase applications due to the first decline in rates in over two months. This gain was offset by a drop in refinancing activity, underscoring mixed market dynamics.
