The dollar remains on the defensive, sending the euro to 1.1940 for the first time since early-September
Wall Street stocks closed mixed on Wednesday as worse-than-expected economic data prompted a retreat back to tech stocks. Minutes of the FOMC’s November meeting showed that policymakers judged immediate adjustments to the pace and composition of asset purchases were not necessary. However, stocks showed no immediate reaction to minutes.
On the data front, the US real GDP rose at an annual rate of 33.1% in the third quarter, matching the initial estimate but lower than 33.2% expected, while weekly initial jobless claims rose by 30,000 last week, to 778,000 versus 748,000 (revised from 742,000) previously. As a result, the S&P 500 fell 0.2%, the Dow gave up 0.6%, and the tech-heavy Nasdaq gained 0.5%.
Asian equities were mostly up on Thursday, with trading activity is getting lower as U.S. markets are closed today for the Thanksgiving holiday and will be open for half the day on Friday. Japan’s benchmark Nikkei 225 gained 0.9%, Australia’s S&P/ASX 200 slipped 0.7%, South Korea’s Kospi gained 0.93% and the Shanghai Composite rose 0.22%.
In Europe, equities open slightly higher to start the day as the risk mood is keeping calmer. According to the latest reports, Germany’s Merkel warned that easing virus curbs would not be responsible, and more still needs to be done to rein in virus spread as virus cases are still much too high.
As for currencies, the dollar remains on the defensive on Thursday, sending the euro to 1.1940 for the first time since early-September. If the common currency managed to retain a bullish tone, the next target could be expected at 1.1980. However, EURUSD will likely encounter a local resistance in the 1.1955 area as trading activity is getting more muted amid holidays in the United States.
Elsewhere, oil prices extended the rally to $49 and proceeded to a bearish correction on Thursday as risk demand continues to wane after the recent rally. As Brent looks overbought at the current levels, the futures could lose ground further in the short term. On the other hand, the persisting vaccine hopes along with OPEC-related expectations could cap the potential selling pressure surrounding oil prices.