The US dollar headed toward a weekly loss on Friday, as investors trimmed positions while awaiting a clearer assessment of the backlog of US economic data following the government’s reopening.

Traders sold the US currency despite rising yields and declining expectations of a Federal Reserve rate cut next month. The moves came alongside broad selling in US equities and bonds, which extended into Asian stock markets on Friday.

Ray Attrill, head of FX strategy at National Australia Bank (NAB), said: "There’s a whiff of a return to ‘sell America’ in the air."

A growing number of Federal Reserve officials have signaled caution toward additional easing, citing inflation concerns and signs of relative stability in the labor market.

Even so, the shift toward a more hawkish stance failed to support the dollar, which fell to a two-week low versus the euro in the previous session. The single currency rose above 1.16 dollars and was last up 0.1% at 1.1644 dollars.

The Swiss franc also held near its strongest level in more than three weeks, trading at 0.7919 per dollar. Meanwhile, the US Dollar Index hovered near a two-week low at 99.14, on track for a weekly decline of 0.4%.

Joseph Capurso, head of international and geopolitics FX research at Commonwealth Bank of Australia, said markets will begin receiving a flood of delayed US data next week, adding: “We think it’s going to be very bad.”

Under normal circumstances, such data would reinforce expectations for further rate cuts to support the economy, but the expected fragmentation of upcoming releases may explain why rate expectations have shifted in the opposite direction.

The White House also noted that the October unemployment rate may not be published at all, as the household survey underpinning the data was not conducted during the shutdown.

“When you’re in the fog, you drive slowly… and when you don’t know what’s happening in the economy, you may slow the pace of easing,” Capurso said.

Investors are currently pricing a better-than-50% chance of a 25-basis-point rate cut in December, while a January cut is almost fully priced in. Expectations for 2026 remain largely unchanged.

Asia saw an active session in currencies, with sharp moves in the British pound and the Korean won, while China’s onshore yuan strengthened to its highest level in more than a year.

Sterling fell 0.3% to 1.3152 dollars after failing to hold overnight gains of 0.45% against the weaker dollar. The decline followed a Financial Times report that UK Prime Minister Keir Starmer and Finance Minister Rachel Reeves had abandoned plans to raise income tax weeks before the November 26 budget announcement.

“If that means fiscal tightening won’t be as severe as expected, it could be less harmful for the economy — but foreign investors in UK bonds will worry more about the underlying fiscal position,” said NAB’s Attrill, describing the market’s quick negative reaction as justified.

The Korean won jumped 1% against the dollar after authorities pledged measures to support the currency, amid speculation of direct intervention via dollar sales.

The Japanese yen found some support from the weaker dollar but remained near a nine-month low, trading at 154.51 per dollar and still heading for a weekly loss of 0.7%.

In Australia, the Australian dollar remained under pressure after falling in the previous session amid risk aversion linked to expectations of higher-for-longer US rates. The aussie rose 0.11% to 0.6538 dollars, while the New Zealand dollar gained 0.6% to 0.5687 dollars, supported by data showing a pickup in industrial activity in October and news that the Reserve Bank of New Zealand would ease mortgage-lending restrictions from December 1.

In China, the onshore yuan hit a one-year high at 7.0908 per dollar, supported by exporter-driven dollar selling after a key technical level was breached.

Friday’s data showed China’s industrial output and retail sales posting their weakest growth in more than a year in October, while new home prices recorded their fastest monthly decline in twelve months.

Gold prices rose in the European market on Friday, resuming the gains that temporarily paused yesterday due to correction and profit-taking, and moving once again toward a three-week high. The metal is also on track to record a weekly gain, supported by the weaker performance of the US dollar in the foreign-exchange market.

These gains are being limited by more hawkish comments from several Federal Reserve officials, which have reduced expectations of a US rate cut in December. Investors are also awaiting the resumption of official economic data releases after the reopening of the federal government.

Price Overview

• Gold prices today: Spot gold rose by 0.95% to 4,211.52 dollars per ounce, from the opening level of 4,171.72 dollars, after touching an intraday low of 4,159.09 dollars.

• At Thursday’s settlement, gold lost 0.55% in its first decline in five sessions, due to correction and profit-taking, after earlier touching a three-week high of 4,245.13 dollars per ounce.

Weekly Trading

So far this week—ending officially at today’s settlement—gold prices are up by more than 5%, and are on the verge of recording their first weekly gain in a month.

US Dollar

The US Dollar Index fell on Friday by 0.1%, extending losses for a second session, and nearing a two-week low, reflecting the continued decline of the US currency against a basket of major currencies.

As we know, a weaker dollar makes dollar-priced bullion more attractive for holders of other currencies.

Despite the reopening of the US government after the longest shutdown in the nation’s history, markets remain concerned about the longer-term impact of the shutdown on US economic activity.

US Interest Rates

• Mary Daly, President of the San Francisco Federal Reserve, said on Thursday that the risks facing the Fed’s objectives of price stability and full employment are now “balanced.”

• Beth Hammack, President of the Cleveland Federal Reserve, stated that interest-rate policy should remain restrictive in order to pressure inflation, which remains elevated.

• Alberto Musalem, President of the St. Louis Federal Reserve, noted that monetary policy is now closer to neutral than moderately restrictive, leaving limited room for further easing without becoming overly accommodative.

• According to the CME FedWatch tool: Market pricing for a 25-basis-point cut in December fell from 67% to 51%, while expectations of holding rates steady rose from 33% to 49%.

Investors continue monitoring Fed commentary closely, with expectations that official US data releases will resume soon.

Gold Outlook

Brian Lan, managing director at Gold Silver Central in Singapore, said gold performed strongly this week mainly due to the weaker dollar and speculative inflows anticipating Fed rate cuts.

He added that with the US government reopening—and amid concerns about slowing growth and persistent inflation—expectations have shifted slightly toward the Fed not cutting rates aggressively, which is putting some negative pressure on gold.

SPDR Fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 2.29 metric tons on Wednesday, marking a third consecutive increase, bringing total holdings to 1,048.93 metric tons—the highest level since October 22.

The euro rose in European trade on Friday against a basket of major currencies, extending gains for a fourth consecutive session against the US dollar and approaching a two-week high. The single currency is on track to secure a second straight weekly advance, supported by broad weakness in the US dollar amid mounting concerns over an economic slowdown in the United States.

Although inflationary pressures have eased somewhat for European Central Bank policymakers — particularly after recent data showed a slowdown in October inflation — expectations for a rate cut in December remain limited.

Price Overview

• EUR/USD climbed 0.1% to 1.1645 dollars, up from the opening level of 1.1633 dollars, after touching a low of 1.1623 dollars.

• The euro ended Thursday’s session up 0.35% against the dollar, marking a third consecutive daily gain and reaching a two-week high at 1.1656 dollars, as investors focused on buying lower-yielding currencies.

Weekly Performance

For the week ending today, the euro is up around 0.75% against the US dollar and is on course to record a second consecutive weekly gain.

US Dollar

The US Dollar Index fell 0.1% on Friday, extending losses for a second straight session and nearing a two-week low, reflecting continued weakness in the greenback against a basket of global currencies.

Despite the reopening of the US government following the longest shutdown in the country’s history, markets remain concerned about the long-term economic impact of the closure on US activity.

European Interest Rates

• Recent data in Europe showed headline inflation in the eurozone slowing in line with expectations in October, while core inflation remained steady — easing some of the pressure on ECB policymakers.

• Following the data, market pricing for a 25-basis-point rate cut in December rose from 10% to 25%.

• Investors now await additional economic releases in Europe, along with remarks from ECB officials, to reassess rate expectations.

The Japanese yen rose in Asian trade on Friday, extending its recovery for a second consecutive session from a nine-month low against the US dollar, supported by active buying at lower levels and by weakness in the US currency amid mounting concerns over an economic slowdown in the United States.

Despite today’s rebound, the yen remains on track to post a weekly loss, pressured by recent comments from Prime Minister Sanae Takaichi that signal a new phase of fiscal stimulus aimed at supporting Japan’s sluggish economic growth.

Price Overview

• USD/JPY slipped 0.15% to 154.31 yen, down from the opening level of 154.51 yen, after touching a high of 154.74 yen.

• The yen ended Thursday’s session up 0.2% against the dollar — its first gain in five days — rebounding from a nine-month low of 155.04 yen.

US Dollar

The US Dollar Index fell 0.1% on Friday, marking a second day of declines and approaching a two-week low, reflecting continued weakness in the greenback against a basket of major currencies.

Although the US government has reopened following the longest shutdown in the nation’s history, markets remain uneasy about the long-term economic impact of the prolonged closure.

Weekly Performance

For the week ending today, the yen is still down around 0.6% against the dollar and is on the verge of recording its third weekly loss this month.

Sanae Takaichi

Prime Minister Sanae Takaichi announced this week that her administration will introduce a multi-year fiscal target allowing greater flexibility in government spending — a shift that could weaken Japan’s commitment to restoring its public finances.

Takaichi also reiterated her call for the Bank of Japan to proceed cautiously and slowly with interest-rate hikes, stressing the need to balance supporting economic growth with maintaining price stability.

Analysts say her remarks may signal a new phase of expansionary fiscal policy, though they also present additional challenges for the Bank of Japan as it attempts to coordinate monetary policy with a more accommodative fiscal stance.

Japan Interest Rates

• Market pricing for a 25-basis-point rate hike by the Bank of Japan in December remains below 50%.

• Investors are awaiting fresh data on inflation, unemployment, and wage growth in Japan before reassessing rate expectations.