Forex Today: US Dollar consolidates weekly gains ahead of Retail Sales, Fedspeak

Here is what you need to know on Friday, November 15:

Asian stocks remained a mixed bag, dragged by the mixed Chinese activity data and a pessimistic Wall Street close overnight. Despite a notable increase in China’s Retail Sales, the country’s disappointing Industrial Production and Fixed Asset Investment data amplify the economic concerns, keeping markets on edge.

An air of nervousness prevails amid a lack of certainty on the US Federal Reserve’s (Fed) future interest rates. Markets pared back expectations of a 25 basis points (bps) rate cut in December after Fed Chair Jerome Powell’s hawkish shift and the hot Producer Price Index (PPI) data released on Thursday.

Powell noted that the central bank does not need to rush to reduce rates, citing ongoing economic growth, a solid job market and sticky inflation as reasons for caution against easing policy too quickly. Meanwhile, annual headline PPI increased by 2.4% in October after rising by 1.9% in September and following Wednesday’s sticky US CPI inflation figures.

The market pricing for a 25 bps rate cut next month has dropped to about 69% from 83% a day ago, the CME Group’s FedWatch tool shows.

Increased expectations of fewer Fed rate cuts have provided extra legs to the Trump trades-driven rally in the US Dollar (USD)  and the US Treasury bond yields. Traders now look forward to the US Retail Sales and Industrial Production data for fresh cues on the health of the economy, which could alter Fed easing expectations. A couple of Fed policymakers are scheduled to speak later in American trading.

Across the Atlantic, the UK is due to report the preliminary third-quarter Gross Domestic Product (GDP) data alongside the Manufacturing Production data. Meanwhile, European Central Bank (ECB) officials are on the radar as markets are pricing in aggressive policy easing in the face of a worsening economic outlook.

Across the FX board, USD/JPY refreshed four-month highs at 156.75 before retracing gains to trade near 156.50. Japanese verbal intervention warnings rescued Japanese Yen buyers from the unimpressive Q3 GDP-induced pain.

Antipodeans shrug off the tepid risk tone and mixed Chinese data, continuing their recovery from multi-month troughs. AUD/USD is back above 0.6450 while NZD/USD regains 0.5850.

USD/CAD is trading sideways above 1.4050 amid a 1% sell-off in WTI Oil and ahead of the Canadian data set. The US oil is back in the red after giving up the $68 threshold again.

EUR/USD holds the rebound above 1.0500, awaiting ECB-speak and US data for further trading incentives.

GBP/USD remains capped below 1.2700, with traders refraining from placing fresh bets on the Pound Sterling ahead of the top-tier UK and US data releases. On Thursday, BoE policymaker Catherine Mann argued that the central bank should maintain rates at their current level until the upside risks to inflation.

Gold challenges the critical daily support at $2,545 as sellers fight back control amid sustained US Dollar demand.