Dollar reaching overbought conditions, still poised to run

What you need to know on Wednesday, November 17:

The greenback strengthened against most major rivals, reaching fresh 2021 highs against the shared currency. The dollar was partially underpinned by a sour market mood, later by upbeat US data.

The macroeconomic calendar was a bit busier on Tuesday. The UK published employment figures, which showed that those claiming unemployment benefits decreased by 14.9K MoM, while the ILO Unemployment rate for the three months to September contracted by more than anticipated to 4.3%. Average Earnings in the same period were up 4.9% excluding bonus, and 5.8% including bonus.

The EU published the second estimate of its Q3 Gross Domestic Product, which was confirmed at 2.2% QoQ. Employment change in the same quarter was up 0.9%, beating expectations. Finally, the US released September Retail Sales and Industrial Production figures, which came in better than anticipated, further supporting the greenback.

Meanwhile, EU gas prices were up over 12%, as Germany suspended Nord Stream 2 certification. Geopolitical tensions escalated in Europe, and higher gas prices would certainly will affect inflation.

The EUR/USD pair trades around 1.1320, while GBP/USD is stable at around 1.3430. Commodity-linked currencies lost ground vs the greenback although they held within familiar levels.

Gold reached a fresh multi-month high of $1,877.15 but pulled back to close in the red for a second consecutive day in the 1,850 price zone. Crude oil prices shed some ground, with WTI down to $79.70 a barrel.

US Treasury yields reached fresh weekly highs, with that on the 10-year note reaching 1.63%,  further supporting the dollar’s demand.

Global indexes struggled to post gains, ending the day mixed. Wall Street opened with substantial gains but gave up to the risk-off mood.

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