Forex Today: US Dollar struggles to extend recovery on last trading day of week

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

The US Dollar (USD) took advantage of the risk-averse market atmosphere on Thursday and the US Dollar Index ended up closing the day modestly higher. With the benchmark 10-year US Treasury bond yield edging lower and the market mood improving early Friday, the USD is having a difficult time preserving its strength. European Central Bank President Christine Lagarde is scheduled to deliver a speech at 1130 GMT. Later in the day, October Existing Home Sales data will be featured in the US economic docket. Ahead of the weekend, market participants will pay close attention to comments from central bankers.

On Thursday, the data from the US revealed that Housing Starts and Building Permits declined by 4.2% and 2.4% in October, respectively, reminding investors of the negative impact of the US Federal Reserve's (Fed) tightening on the housing market.

Meanwhile,  St. Louis Federal Reserve President James Bullard said that the monetary policy was not yet sufficiently restrictive to reduce inflation. Commenting on the rate outlook, Minneapolis Federal Reserve Bank President Neel Kashkari noted that it was unclear how high the Fed will need to raise the policy rate to bring inflation down by restraining demand through higher borrowing costs. Although the 10-year US T-bond yield gained more than 2% on Thursday, it lost its traction and was last seen holding steady at around 3.75%.

EURUSD fell toward 1.0300 on Thursday but erased the majority of its daily losses before closing the day above 1.0350. The pair trades in a narrow range at around 1.0370 early Friday as investors await the next catalyst.

GBPUSD fell sharply during the European trading hours on Thursday and touched a daily low of 1.1764 before staging a decisive recovery later in the day. The pair currently trades slightly below 1.1900, posting modest daily gains. While presenting the Autumn Budget to parliament, British Chancellor Jeremy Hunt announced £55 billion in tax rises and spending cuts to fill a massive funding gap. "Today’s statement delivers a consolidation of £55 billion and means inflation and interest rates end up significantly lower," Hunt explained. In the meantime, the data published by the UK's Office for National Statistics revealed that Retail Sales rose by 0.6% in October. 

The data from Japan showed on Friday that the National Consumer Price Index (CPI) jumped to 3.7% in October from 3% in September. This reading came in much higher than the market expectation of 2.7%. Commenting on the inflation report, "it is true that the CPI data shows significant price increases," Bank of Japan (BOJ) Governor Haruhiko Kuroda acknowledged. Regarding the policy outlook, however, Kuroda reiterated that they would maintain the easy monetary policy to support the economy. USDJPY edged lower during the Asian trading hours and was last seen trading in negative territory below 140.00.

Pressured by rising US T-bond yields, Gold price fell nearly 1% on Thursday and registered losses for the second straight day. With US yields holding steady early Friday, XAUUSD managed to turn positive on the day above $1,760.

Bitcoin continues to move up and down in a narrow channel above $16,000 for the third straight day on Friday. Ethereum lost more than 1% on Thursday but rebounded above $1,200 early Friday.