Drop in oil weighing on the CAD to end the week

Key Movers

The USD Index (DXY) is finding support heading into Friday after sell-offs continued yesterday.  The USD weakness is stemming from a shift to price in a 75 point hike at the next Fed meeting after release of the last FOMC minutes on Wednesday.  Today sees the continuation of the Thanksgiving holiday in the US with markets open this morning but close early at 1 PM EST with trading volumes expected to be light.

The US dollar retreated through trade on Thursday, struggling under the weight of the week’s risk-on narrative and a further decline across US rates. With US markets closed for Thanksgiving trading volume was thin and US treasuries continue to point downward adding to the 14 basis point fall seen through Monday, Tuesday and Wednesday. With the US under pressure the euro pushed back above €1.04, while the GBP extended its upturn marking a new 3-month high at £1.2150 before edging lower into this morning’s open. Against a backdrop of lower rates the JPY enjoyed sustained support as the USD consolidated a break below ¥140. With little of note on today’s ticket our attentions remain with the risk narrative for direction into the weekly close. Having come under sustained pressure through the last 2-3 weeks we anticipate a period of consolidation ahead of key risk events through early December.