Original article credit: InvestingLive — “America’s FX News Wrap – 24 Nov: The USD Closes the Day Mixed, Nasdaq Soars”
Title: US Dollar Ends Mixed Amid Light Holiday Trading; Nasdaq Posts Strong Gains
As the Thanksgiving holiday shortened the trading week in the United States, financial markets witnessed relatively subdued activity. Despite lower participation, the final trading day of the week, November 24, delivered a notable performance in US equities with the tech-heavy Nasdaq posting significant gains. In contrast, the US dollar (USD) finished the day with mixed performance across major FX pairs, reflecting the absence of clear directional catalysts and continued speculation over the future path of the Federal Reserve’s interest rate policy.
Key Themes from the Day:
– Nasdaq surges as investors bet on tech-forward momentum
– US dollar ends Friday flat to lower against several major currencies
– Light volume expected ahead of year-end as global markets prepare for economic transition
– Bond yields slip lower, supporting risk appetite and equities
– Fed’s monetary policy path remains central to broader market sentiment
US Equities Close with Significant Gains
The US equity market concluded the Thanksgiving-shortened session on a high note, led by strong performance in mega-cap tech stocks. Reduced trade volumes, typical of holiday sessions, did little to dampen investor optimism as dip-buyers returned to popular growth names.
– The Nasdaq Composite climbed 0.29 percent on the session, closing at 14,250
– The S&P 500 and Dow Jones Industrial Average also posted gains, albeit more modest
– Strength in semiconductor stocks and large-cap technology names like Apple, Microsoft, and NVIDIA helped lead the Nasdaq advance
Traders appeared to anticipate that inflationary pressures might continue moderating, fueling hopes that the Federal Reserve is near the peak of its tightening cycle. This outlook has contributed to optimism around tech and growth sectors, which typically benefit from lower rates and a more predictable macroeconomic environment.
Mixed US Dollar as Fed Rate Speculation Continues
In the foreign exchange markets, the US dollar exhibited mixed performance over the course of the day. With no major economic data released and light trading volumes typical of the Thanksgiving weekend, currency moves were driven mainly by technical flows and lingering expectations regarding the Federal Reserve’s future monetary policy.
The US Dollar Index (DXY), a measure of the greenback against a basket of six major currencies, was little changed around the 103.40 level.
Performance Against Key Majors:
– EUR/USD edged slightly higher, closing near 1.0940 as the euro benefited from mildly improved risk sentiment and rate differentials
– GBP/USD traded modestly up to 1.2590, helped by risk-on flows and a subdued dollar
– USD/JPY drifted lower to around the 149.30 mark, reflecting downward pressure on Treasury yields and dampened appetite for carry trades
– AUD/USD held firm near 0.6580, supported by gains in commodities and resurgence in equity markets
– USD/CAD traded little changed around the 1.3640 level, with the loonie largely tracking crude oil prices and broader market sentiment
Bond Yields Decline Further
US Treasury yields declined modestly as the bond market closed early on Friday. Lower yields were a key feature that supported equity markets over the session and weighed on the dollar’s performance throughout the week.
– The benchmark 10-year Treasury yield fell to around 4.45 percent, retreating from recent multi-year highs above 5 percent
– The 2-year yield also slid as positioning adjusted ahead of the December Federal Open Market Committee (FOMC) meeting
Falling yields are being interpreted by markets as signaling expectations that the Federal Reserve may soon pivot toward a more accommodative stance, or at the very least, pause further rate hikes. This view has strengthened over recent weeks as headline and core inflation readings eased, giving the Fed some flexibility in its policy approach.
Central Bank Commentary and Market Expectations
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