The US dollar continues to trade steady, supported by strong economic data releases from the US this week. At the time of writing, the US dollar index DXY is trading at around 98.33.

Most currencies traded in tight ranges ahead of the Thanksgiving holiday this week, but the US dollar had a good week on account of strong numbers revealing the health of the US economy. Of course, trade tensions between the US and China stayed in focus and continued to weigh on global markets.

While on the one hand, officials from both sides continued to maintain that negotiations were progressing well, on the other, US President Donald Trump signed two laws in support of the anti-government protesters in Hong Kong. Financial markets have been trading cautious as they wait to see how China plans to retaliate to US’s latest move, and are concerned that this could raise tensions in their fragile trade relationship all over again.

The Fed has also improved its outlook for the US economy as a result of the positive data releases lately. This has helped reduce the possibility of the next rate cut by the Fed. For now, markets are pricing in an 11% likelihood of the Fed reducing interest rates to 0.5%.