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Hello everyone, today XM Forex will bring you "[XM Forex]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On November 28, the foreign exchange market ushered in a period of intensive interweaving of long and short news. The divergence of Fed policy expectations, the contrast in European and American economic data, and geo-risk disturbances formed the core game. As of early trading, the U.S. dollar index fluctuated in the 99.2-99.5 range, the EUR/USD stood firm at the 1.15 mark, the GBP/USD relied on the support of 1.31 to fluctuate, and www.xmxmxm.cnmodity currencies were stronger due to the rebound in www.xmxmxm.cnmodity prices. This article systematically sorts out the positive and negative factors that affect the day's market, and gives key trading tips based on institutional perspectives.
Marginal improvements in Eurozone economic data have become the core driving force supporting the euro. The initial value of the Eurozone's November consumer confidence index released on November 27 rose to -12.8, a significant increase from -14.2 in October, setting a five-month high; Germany's IFO business climate index in November rose from 90.3 to 91.1, exceeding market expectations of 90.5, with the business expectations sub-index rising to 92.0, indicating that www.xmxmxm.cnpanies' concerns about the economic outlook have eased. Villeroy, an official of the European Central Bank, stated on the same day that "if inflation maintains a downward trend, interest rate cuts may be initiated in the second quarter of 2026, but the current policy still requires patience." The market expects the ECB to ease policy later than the Fed, and the marginal improvement in interest rate spread expectations promotes an increase in euro buying.
The dual positive data on British consumption and employment support the resilience of the pound. Data from the British Office for National Statistics showed that retail sales increased by 0.6% month-on-month in October, higher than the expected 0.3%, with food retail and online sales becoming the main growth points; the ILO unemployment rate remained unchanged at 3.8% in the three months to September, and wage growth increased year-on-year.7.2%. The resilience of the job market provides guarantee for the recovery of consumption. The minutes of the Bank of England's November meeting showed that members agreed that "high interest rates need to be maintained until mid-2026." In contrast to market expectations for the Federal Reserve to cut interest rates in the first quarter of next year, the GBP/USD interest rate advantage has gradually become more prominent.
The rebound in www.xmxmxm.cnmodities boosted www.xmxmxm.cnmodity currencies. Driven by expectations of OPEC+ production cuts and Red Sea shipping risks, WTI crude oil rose to US$69.8/barrel in early trading on November 28, and copper prices exceeded US$8,500/ton, driving the Australian and Canadian dollars to strengthen. Australia's inflation rate unexpectedly rose to 3.5% in October, and the market's expected probability of an interest rate hike by the Reserve Bank of Australia in December rose from 15% to 30%. Canada's core CPI in October rose by 3.1% year-on-year. The Bank of Canada maintained interest rates unchanged to strengthen policy stability. USD/CAD fell back to 1.3350 in early trading.
hawkish officials from the Federal Reserve have spoken out to support the U.S. dollar. Cleveland Fed President Mester emphasized on November 27 that "the current service inflation is still 3.2%, well above the 2% target, and cutting interest rates too early may lead to a rebound in inflation" and opposed the discussion of interest rate cuts in December. St. Louis Fed President Bullard added that "the Federal Reserve should maintain high interest rates until the second quarter of 2026 and should not cut interest rates more than twice throughout the year." The hawkish remarks eased the selling pressure on the US dollar. Interest rate futures data show that the market's expected probability of the Federal Reserve cutting interest rates in December has dropped from 85% to 78%, and the U.S. dollar index has found short-term support.
Emerging market risks triggered a return of safe-haven funds. The new president of Argentina announced www.xmxmxm.cnprehensive dollarization reforms, causing the Argentine peso to plummet 12% in a single day, triggering currency turmoil in emerging markets; the Central Bank of Turkey unexpectedly cut interest rates by 50 basis points to 35%, and the lira's exchange rate against the US dollar hit a record low. Risk aversion drove some funds to return to U.S. dollar assets, and the U.S. dollar generally strengthened against emerging market currencies, indirectly supporting the U.S. dollar index.
Japanese intervention is expected to cool down and suppress the yen. On November 28, a Japanese Ministry of Finance official stated that "the current yen exchange rate is still within a reasonable range and no immediate intervention measures are needed." Market concerns about yen intervention eased, and USD/JPY rebounded to 156.70 in early trading. Japan's core CPI rose by 2.8% year-on-year in October, but the preliminary value of Tokyo's CPI in November fell to 2.5%. The fall in inflation weakened the Bank of Japan's policy change momentum, and the yen remains weak in the short term.
There are three key events to focus on today: First, the final value of U.S. third-quarter GDP and core PCE data released at 20:30 Beijing time. If the GDP growth rate is revised downwards and the PCE rebounds, The second is Fed Chairman Powell's speech at 22:00, whose stance on inflation and policy will directly dominate the trend of the U.S. dollar. The third is the release of the minutes of the European Central Bank's November monetary policy meeting, which requires attention to the differences between members on the timing of interest rate cuts.
In terms of trading strategy, EUR/USDYou can rely on the support of 1.1480 to go long with a short position, stop loss 1.1450, target 1.1550; GBP/USD pay attention to the key support of 1.3100, and place long orders after firming up, target 1.3160; USD/JPY sell high and buy low in the 156.30-157.00 range, set a stop loss of $0.3. What needs to be vigilant is that the current volatility in the foreign exchange market has risen to 10.8%. It is advisable to control positions within 50% before the data is released to avoid excessive concentration on a single currency pair and guard against the risk of market gaps.
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