Dollar consolidates after big weekly gains
25 November 2021
The greenback slipped Friday, consolidating after this week's huge rally, which brought the EURUSD pair below 1.12 and the USDJPY pair above 1.15. The first traded at 16-month highs, while the latter jumped to five-year highs.
Later today, several ECB governors, including Lagarde, will speak, possibly dragging the euro lower due to their ultra-dovish stance (despite soaring inflation everywhere).
On Wednesday, the FOMC minutes showed that the Fed could quicken the pace on its asset tapering program, and hike interest rates quicker than expected if high inflation persists.
Additionally, San Francisco Fed President Mary Daly also said on Wednesday that she could see a case being made to speed up asset tapering. She is considered a dove, thus her comments were rather surprising.
Yesterday, US Durable Goods Orders were released, dropping 0.5% month-on-month (versus +0.2% expected) in October, and September's 0.3% monthly print was revised down to -0.4%.
Additionally, the University Of Michigan's Sentiment rose from 66.8 preliminary to 67.4 final but remains well below the 71.7 in October. However, consumers’ inflation expectations remained at their highest since 2008.
US equities erased their losses yesterday and turned higher, with the slight bullish momentum continuing today. Fridays are usually bullish for stocks and the uptrend might prevail today, pushing equities toward their all-time highs.