iFOREX Daily Analysis : November 23,2017

 | Nov 23, 2017 05:20AM ET

The US Dollar traded lower against other major currencies with the US Dollar Index (USDX) closing 0.79% lower due to Durable Goods New Orders below expectations and the FOMC stating in its minutes that it is concerned that the economy could overheat at some point.
The South African Rand (ZAR) improved over 1 percent against the US Dollar as investors have mixed expectations whether rating agencies Moody’s and S&P would downgrade the country’s sovereign rating to “junk”.

Gold edged higher on lower long term Treasury yields and fears of an inverted yield curve which some investors believe could indicate a long term lower growth expectation. Oil raced higher reaching a new 2.5 year high as the Energy Information Administration’s (EIA) US oil stockpile figures were lower by 1.9 million barrels. Markets will continue to evaluate what progress the OPEC will make of an extension agreement for production cuts at their meeting on the 30th November in Vienna.

US equity indices closed mostly lower after mixed economic data and concern by the Federal Reserve that the markets could be showing signs of overheating.

Bitcoin traded within Tuesday’s range and held over a week a gain of over 13%. Other major cryptocurrencies were also higher with Dash and Monero continuing their rally with a weekly performance of close to 40% higher. Fundstrat's Tom Lee, a leading Wall Street analyst, raised its outlook for mid-2018 for Bitcoin to $11,500 after being less optimistic in the past.

On Thursday Germany is publishing GDP, Services and Manufacturing PMI data complemented by said PMI data from the European Union. From France we will see the Business Climate Indicator. The European Central Bank (ECB) is set to release its meeting’s minutes. The United Kingdom will publish GDP and CBI Distributive Trades data. Canada publishes Retail Sales statistics.

EUR/USD

The Euro sharply gained against the US Dollar on Wednesday as the FOMC minutes indicated that the central bank fears imbalances in the markets while being supporting of the proposed tax reform by the Trump administration. The Durable Goods New Orders were in monthly comparison down by 1.2% (previous +2.2%), while traders expected a gain of 0.4%.

On Thursday Germany is publishing GDP, Services and Manufacturing PMI data complemented by said PMI data from the European Union. From France we will see the Business Climate Indicator. The European Central Bank (ECB) is set to release its meeting’s minutes.