FOREX TODAY: DOLLAR STRUGGLES AHEAD OF AN UNUSUAL WEEK

A light economic calendar, a shortened week, and reduced trading during the holidays all suggest unusual price movement in the final days of 2023. Will the Santa rally go on？ Will pressure on the US dollar continue？

For next week, you should be aware of the following:

Next week's economic calendar is light. Furthermore, holiday-thinned trading may encourage false breakouts limited price action. On Monday, trading platforms won't be operational.

The past week saw gains. US Treasury rates decreased when the Dow Jones hit all-time highs. At 3.90%, its lowest level since July. Next week, will Santa remain on Wall Street？

For the second consecutive week, the US Dollar Index monthly lows below 102.00. Because of the reduced yields and increased risk appetite, it is still moving in a bearish direction. The Federal Reserve (Fed)'s projected market repricing in 2024 keeps the greenback under pressure.

The most important statistic for this week was the Core Personal Consumption Expenditure (Core PCE), which increased 3.2% from a year ago in November but by 0.2% less. For the first time since 2020, the headline index had a 0.1% decrease in November. The data provides inflation is heading in the direction of the Fed's 2% target. Next week's US data will feature the Chicago PMI (Friday), jobless claims (Thursday), and home prices (Tuesday).

The difficulty for the EUR/USD will be to stay above 1.1000 after it moved above it this week. In the last five months, the pair's weekly close was at its highest. On Friday, Price Index (CPI) for December will be released.

The GBP/USD pair saw limited weekly gains and struggled to stay above 1.2700. The Pound suffered from the UK's unexpectedly weak inflation figures, even though it was up against the US Dollar. From 0.8575 to 0.8660, EUR/GBP increased, regaining the 20-week Simple Moving Average. Next week is not due data from the UK.

The Bank of Japan (BoJ) meeting, the Japanese Yen performed the poorest out of all the majors during the week. Though it ended far from the weekly peak at 142.50, the USD/JPY showed, indicating that the risks are primarily to the downside. The Summary of Opinion from the most meeting will be made public by the BoJ on Wednesday. Data on retail commerce and industrial production are due. The economic data from Japan may become the anticipations surrounding the possible withdrawal of the BoJ's negative interest rate.

There are no upcoming pertinent economic reports from Australia, New Zealand, or Canada. For the second week in a row, AUD/USD and NZD/USD recorded significant increases, with the highest close since July. Price movement by USD dynamics.

The USD/CAD plummeted, closing at a level below 1.3300 for the first time since August. The AUD and NZD outpaced the Canadian dollar due to risk appetite and prices.

The weekly close for gold was the second-highest on record. XAU/USD is on the rise and at $2,050. The yellow metal may stem from a reduction in Fed easing forecasts. A significant fall in gold could be sparked by an increase in US yields.