Thin holiday trading keeps USD in the driver’s seat – Commerzbank

This week is a short week, at least for US trading, as Thanksgiving is celebrated on Thursday. Experience shows that trading will be correspondingly thin from Wednesday afternoon onwards. Ultimately, the US Dollar (USD) sets the tone on the foreign exchange market, and few market participants in the US are likely to have an appetite for large positions or revaluations of their opinions without any fundamental news ahead of the long weekend, Commerzbank's FX analyst Antje Praefcke notes.

Delayed U.S. data unlikely to move FX markets

"Today, retail sales and producer prices for September are on the agenda, both with considerable delay. Ultimately, therefore, they are old news and, moreover, tend to be second-tier data, so in my opinion, such data is unlikely to cause any significant movement, especially ahead of a long weekend. In addition, the Conference Board's US consumer confidence index for November will be published today. Tomorrow, durable goods orders for September will be released. Both of these data points could provide a little more momentum to the FX market, but at least in the case of durable goods orders, they are also a look in the rearview mirror."

"Given that the labor market report for October will not be published at all and the one for November will only be published after the Fed meeting (9/10 Dec) on December 16, initial jobless claims, which will be published tomorrow due to the holiday on Thursday, could attract increased attention. After all, the market is hungry for information that could provide an indication of how likely an interest rate cut is in December, but above all, further interest rate cuts in 2026. However, a cut in December has already been largely priced in. If the market becomes even more convinced about this cut, I therefore expect only slight downward pressure on the dollar."

"Labor market data is currently highly valued by the market, as the Fed is focusing on the employment situation. However, I do not think that the initial claims will trigger enough momentum for us to see a major movement in the dollar. All in all, I expect we will have a relatively quiet week ahead and that other issues such as geopolitics could attract more attention. Without any truly unexpected important news, EUR/USD is likely to feel comfortable in the 1.1480-1.1620 range over the next few days."