The US dollar, which tried to locally rise, declined against a basket of major currencies yesterday before the trading day ended.

Investors continued to focus on the impending global economic recovery on Wednesday, despite the pandemic. They believe that the production of effective COVID-19 vaccines will stop the global spread of COVID-19 sooner or later. However, this issue faded into the background, after it became clear that Mr. Biden would finally be the new US president and so, the market focused their attention again on the emerging economic statistics. There were a lot of them yesterday.

The market's attention was initially drawn to the publication of data on the number of applications for unemployment benefits, which did not meet expectations. It showed growth to 778,000 against the forecasted 730,000 and the previous value, which was revised upward to 748,000. The figures clearly indicate that the extended quarantine measures are still noticeably influential and puts pressure on the labor market.

At the same time, preliminary values of US GDP for the 3rd quarter were presented. It remained unchanged at 33.1%, although it was predicted to rise to 33.2%. Another figure gained attention – the basic price index of personal consumption expenditures, which maintained an annual growth rate of 1.4%, did not grow at all on a monthly basis, although it was expected to increase by 0.1% last month against the September value of 0.2%.

In addition, the data of the consumer expectations and sentiment indices from the University of Michigan turned out to be weak. The indicators respectively declined from 79.2 points to 70.5 points and from 81.8 points to 76.9 points.

Overall, the stock market reacted to these figures with a decline in the US stock indices, except NASDAQ 100, which increased. This market behavior, particularly ignoring the negative statistics, is due to hopeful thinking that the COVID-19 vaccine will stop the spread of the said virus and everything will return to normal next year. Investors are hoping for this and so, they rush to buy fairly cheap shares of companies.

This current condition naturally affects the rate of the US currency negatively, which remains under pressure. As indicated above, the ICE dollar index fell below the 92.00 point mark yesterday, which continues today.

Today is a holiday in the US in observance of Thanksgiving Day. Due to this, the local financial market will be closed, which will lead to low activity in global markets.

In general, the US dollar is expected to decline continuously across the entire currency market.

Forecast of the day:

The EUR/USD pair broke through the range of 1.1815-1.1900 and is trading above the level of 1.1930 level. Now, it is likely to continue rising to 1.2000.

The GBP/USD pair is trading below the level of 1.3395. If this level breaks down, further growth can be expected to 1.3475.