Most of the major currencies ended the day unchanged or lower against the U.S. dollar. The only currency pair to experience a real move was the Japanese Yen, which dropped to a fresh 7 month low against the greenback.
For most Americans, Thanksgiving is a time to offer thanks for everything we have and to celebrate with a big family meal. For currency traders, this holiday means lower volatility and liquidity in the FX market. The absence of U.S. traders can be seen in the tighter trading ranges for most major currencies.
While many U.S. traders also take Friday off, the intraday range of the EUR/USD, GBP/USD and USD/JPY tends to expand significantly on the day after Thanksgiving. Some traders are back and the low liquidity exacerbates the volatility in the FX market.
The following table shows that on average since 2003, the trading ranges for the EUR/USD and GBP/USD increases 200% the day after Thanksgiving. The impact on USD/JPY is less significant but we still see similar trading activity.
The abundance of Eurozone data scheduled for release over the next 2 days could drive an increase in activity as well as the possibility of a delayed reaction to this evening's Chinese manufacturing PMI report.
