The broad-based US dollar succeeded in putting a stop to the sharp losses of the previous day, and started to flash green during the European trading session on the day. It is worth mentioning that the US dollar slumped to a 9-month low against the safe-haven yen, even though investors have been gobbling up risky assets all week. This saw the US dollar drop to multi-year lows against the euro, the pound, the Aussie, the kiwi and the Canadian dollar.

However, the fresh gains in the US dollar could be short-lived or temporary, as the hopes that the US stimulus bill will finally be passed, coupled with the Fed’s dovish tone on inflation, is keeping the US dollar under pressure. In this way, the slight decline in the global risk sentiment, as represented by a softer tone of the equity markets, provided some short-covering support to the safe-haven US dollar.

Looking ahead into the coming week, the series of GDPs along with the Tokyo Consumer Price Index (YoY)(Dec) data and BOJ Gov Kuroda’s speech, could drive plenty of headlines to keep the markets on the move. The geopolitical tensions and coronavirus headlines will also be closely followed, as they could play a key role in determining risk levels in the market.

Top Economic Events to Watch This Week

1. EUR Consumer Confidence – Monday – 15:00 GMT

This data, which is usually released by the European Commission, is a leading index that examines consumer confidence in economic activity. However, a high level of consumer confidence stimulates economic expansion. Conversely, a low level drives an economic downturn. In that way, a high figure is considered as bullish for the EU currency; likewise, low figures are seen as bearish for the EUR.

Previous Release

ACTUAL: -17.6

DEV: 0.00

CONS: -17.6

DATE: 11/27/2020 10:00

2. Gross Domestic Product Price Index – Tuesday – 13:30 GMT

The Bureau of Economic Analysis generally releases this data, with the Department of Commerce, which measures the change in the prices of goods and services. Changes in the GDP price index are seen as an indicator of inflationary pressure, which could result in an increase in interest rates. High figures are seen as bullish for the USD currency; likewise, a low reading is considered as negative or bearish for the USD.

Previous Release

ACTUAL: 3.7 %

DEV: 0.00

CONS: 3.7 %

DATE: 11/25/2020 13:30

3. CAD Gross Domestic Product (MoM) – Wednesday – 13:30 GMT

Statistics Canada usually releases this data, which gauges the total value of all goods and services produced by Canada. Changes in the GDP price index are considered a broad measure of Canadian economic activity and health. Thus, high figures are seen as positive or bullish for the CAD currency. Conversely, a falling trend is seen as bearish for the CAD.

Previous Release

ACTUAL: 0.8 %

DEV: -0.20

CONS: 0.9 %

DATE: 12/01/2020 13:30

4. Durable Goods Orders – Thursday – 13:30 GMT

This data is typically released by the US Census Bureau, which gauges the cost of manufacturers’ orders for durable goods. This refers to goods that are intended to last for three years or more, such as motor vehicles and appliances. As these durable products usually require large investments, they are sensitive to the economic situation in the US. The final figure shows the state of US production activity. Therefore, high figures are seen as bullish for the US currency; conversely, low figures are seen as negative (or bearish) for the USD.

Previous Release

ACTUAL: 1.3 %

DEV: 0.13

CONS: 0.9 %

DATE: 11/25/2020 13:30

5. Friday – Christmas Day Holiday All Day 

The US banks will be closed in observance of Christmas Day. Most Forex brokers remain open for every holiday except Christmas and New Year’s Day. Stock markets and banks have slightly different holiday schedules.

Banks facilitate the majority of foreign exchange volume. When they are closed, the market is less liquid, and speculators become a more dominant market influence. This can lead to both abnormally low and abnormally high volatility. Happy Christmas, and enjoy your holidays!