Forex market today was slow, and most currency action remained quite given the Thanksgiving holiday in US yesterday. The focus instead was on European markets.
The EU and UK negotiators completed amendments to the initial draft Brexit agreement faster than expected.
However, the risk mood had been soured with the European Commission’s new rejection of the Italian budget which is the first step in disciplinary procedures that may lead to hefty fines.
Meanwhile, where on one hand the US Fed is on a monetary tightening path, the Bank of Japan maintains its ultra-loose monetary policy due to low growth and inflation. This interest rate differential between U.S. and Japanese bonds, makes the dollar a more attractive bet than the yen.