TODAY IN FOREX: THE US DOLLAR HOLDS ONTO GAINS AHEAD OF IMPORTANT DATA

WHAT YOU SHOULD BE AWARE OF ON TUESDAY, DECEMBER 5 IS AS FOLLOWS:

The US Dollar (USD) beat its main competitors to start the week by taking advantage of safe haven flows and rising US Treasury bond yields. The USD Index steadied over 103.50 early on Tuesday following a nearly 0.5% increase on Monday. Investor attention was drawn to the October JOLTS Job Openings data and the November ISM Services PMI survey.

On the first trading day of the week, Wall Street's major indexes opened sharply lower and kept going lower as investors shifted away from riskier assets due to mounting concerns that the Israel-Hamas crisis could escalate into a wider Middle East conflict. US stock index futures were down 0.2% to 0.4% as of the time of publication, indicating little improvement in the risk appetite. The senior UN humanitarian relief officer, Martin Griffiths, said in a statement on Monday that “every time we think things cannot get any more apocalyptic in Gaza, they do,” regarding the situation there, according to CNN. “People are being ordered to move again, with little to survive on, forced to make one impossible choice after another.”

The Reserve Bank of Australia (RBA) declared after the December policy meeting that it had maintained the policy rate at 4.35%, as anticipated. “Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks,” the Reserve Bank of Australia stated in its policy statement. The AUD/USD exchange rate dropped below 0.6600 as bearish pressure mounted.

US DOLLAR EXCHANGE RATE FOR THIS WEEK

The US dollar's (USD) percentage movement compared to a list of major currencies for this week is displayed in the table below. When compared to the Australian dollar, the US dollar was the strongest.

The major currencies' percentage movements relative to one another are displayed on the heat map. The quotation currency is selected from the top row, and the base currency is selected from the left column. For example, the percentage change shown in the box will indicate EUR (base)/JPY (quote) if you select the Euro from the left column and proceed along the horizontal line to the Japanese Yen.

On Monday, the EUR/USD pair dropped toward 1.0800 and reached its lowest point in more than two weeks. Even though the pair managed to recover and was last observed bouncing somewhat below the 1.0850 area towards the end of the American session, it was unable to maintain its momentum.

Monday saw a loss of almost 50 pip for GBP/USD, which settled below 1.2650 early on Tuesday. There won't be any high-quality macroeconomic data releases on the UK economic docket.

While the USD/JPY saw modest gains on Monday, it struggled to hold above 147.00 on Tuesday during Asian trading hours. The Tokyo Consumer Price Index increased 2.6% annually in November, slower than the 3.3% growth in October, according to data from Japan earlier in the day.

After reaching a new all-time high on Monday above $2,150, gold saw a dramatic decline and ended well below its opening price. The last time we saw XAU/USD consolidating its losses was below $2,050.