Forex Today: Dollar edges lower, gold finds its feet, US consumer confidence eyed

Here is what you need to know on Friday, September 18:

The US dollar is retreating off the highs, allowing other currencies and gold to recover while stocks are stable after several down days. US consumer confidence and several retail sales figures are also lined up as a turbulent week draws to a close.

The greenback is giving ground, paring some of its Federal Reserve-related gains. The Fed signaled no rate hikes through 2023 but refrained from offering new immediate stimulus despite expressing concern on the outlook. That led to a downfall in stocks and demand for the dollar, moves that now partially unwound.

After August’s US retail sales disappointed, the University of Michigan’s preliminary Consumer Sentiment Index for September provides a snapshot on shopping this month. Thursday’s jobless claims release was mixed, but continues showing a downtrend in applications.

See US Michigan Consumer Sentiment September Preview: A large dose of reality

Gold is trading at around $1,950, off the post-Fed lows but below the levels seen prior to the event. The precious metal also depends on the next round of fiscal stimulus. Democrats and Repulicans are deliberating a proposal worth $1.5 trillion that has been designed by a bipartisan group of moderates. There is no white smoke just yet. 

GBP/USD remains highly volatile. Health experts are reportedly suggesting putting the UK on a second national lockdown as cases continue rising. The Bank of England left its rates unchanged as expected but surprised markets by saying that it is testing the effectiveness of negative rates. Sterling plunged before upbeat Brexit developments sent it back up.

European Commission President Ursula von der Leyen said she is “convinced” that the bloc and Britain can sign a deal. Earler in the week, Prime Minister Boris Johnson agreed to compromise with his fellow Conservative Party members on a controversial bill that violates the Brexit accord with the EU.

UK retail sales are set to show a slower pace of recovery in shopping in August. Canada also publishes consumption figures, yet for July, with moderate advances projected there as well.

Global coronavirus cases have topped 30 million, with deaths approaching 950,000. Europe is emerging as a hotspot once again with France grabbing fresh attention. Infections and deaths in the US have seemed to stop falling.

Oil prices are higher despite the decision by OPEC+ to leave production targets unchanged. The Saudi oil minister warned those that gamble against petrol prices that they “will be outching like hell.” 

Cryptocurrencies have been consolidating recent moves, with Bitcoin trading just below $11,000. 

More How central bank inaction turns to action in currencies and what’s next for markets