The U.S. dollar remained under pressure through Thanksgiving Friday as currency traders positioned for a potential shift in Federal Reserve policy, with liquidity evaporating across major crosses. The greenback's slide accelerated following the Nov. 5-6 FOMC meeting, where officials struck a notably cautious tone on further tightening despite sticky core inflation readings, according to market analysts tracking central bank communications.
Cross-Currents in Major Pairs
The euro continued to gain ground against the dollar, bolstered by unexpectedly hawkish commentary from European Central Bank officials at their Nov. 13 gathering. Traders say the ECB's resistance to discussing rate cuts, even as eurozone growth data softened, has narrowed rate differential expectations. Sterling traded with a mixed tone, hampered by concerns over UK fiscal sustainability following the Autumn Statement's borrowing projections, though underlying inflation resilience provided some support. Meanwhile, the yen strengthened modestly as Bank of Japan officials reiterated their timeline for policy normalization, with market participants watching for hints of a December tweak to yield curve control settings.
Commodities and Digital Assets Benefit
Gold prices trended higher throughout November, drawing safe-haven inflows amid persistent Middle East tensions and the dollar's broad-based retreat. Market participants note that institutional appetite for the precious metal has increased, with ETF holdings showing steady accumulation. Bitcoin maintained its upward trajectory as well, with crypto market analysts citing growing mainstream adoption and speculation around regulatory clarity expected in early 2026. Oil markets remained relatively stable, though traders are monitoring OPEC+ production discussions slated for next week, which could influence energy-linked currencies.
Looking ahead, currency strategists expect the pre-holiday positioning to set the tone for December's trading, with the Dec. 17-18 FOMC meeting looming large. "The market is increasingly pricing in a more dovish Fed trajectory for 2026," noted one senior FX trader at a major Wall Street bank, pointing to recent positioning data from the Commodity Futures Trading Commission. Year-end rebalancing flows could amplify moves in the coming weeks, particularly if equity markets maintain their current momentum. Technical analysts suggest key trendlines are being tested across major pairs, though the lack of liquidity this week may be distorting signals.
Disclaimer: This analysis is AI-generated for educational purposes. Traders should verify all information and conduct their own research before making trading decisions.