Forex Today: Quiet start to week as focus remains on geopolitics, central bank speak

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

Financial markets remain relatively quiet at the beginning of the new week. The economic calendar will not feature any high-impact macroeconomic data releases on Monday. Market participants will keep a close eye on headlines surrounding geopolitics and pay attention to comments from central bank officials.

Boosted by hawkish comments from Federal Reserve (Fed) officials, including Chairman Jerome Powell, the US Dollar (USD) Index gained more than 1.5% in the previous week. The index stays in a consolidation phase above 106.50 in the European morning on Monday. Later in the day, Chicago Fed President Austan Goolsbee will be delivering a speech. Meanwhile, US stock index futures trade in positive territory after Wall Street's main indexes closed in the red on Friday. 

Citing two US officials familiar with the decision, CNN News reported over the weekend that US President Joe Biden has authorized Ukraine to use powerful long-range American weapons to strike inside Russia. Reporting on the matter, "the change comes largely in response to Russia's deployment of North Korean ground troops to supplement its own forces, a development that has caused alarm in Washington and Kyiv," Reuters said.

EUR/USD fell nearly 1.7% last week and registered its lowest weekly close since October 2023. The pair holds steady in the early European session and fluctuates at around 1.0550. During the American trading hours, European Central Bank (ECB) President Christine Lagarde will deliver a speech titled "The Economic and Human Issues of a Changing Era" at an event organized by The Collège des Bernardins in Paris, France.

GBP/USD declined over 2% last week and closed in negative territory for the seventh consecutive week. The pair trades in a narrow range slightly below 1.2650 early Monday. On Wednesday, the UK's Office for National Statistics will publish Consumer Price Index (CPI) data for October.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday that the Japanese economy is recovering moderately despite weak signs. "We will scrutinize at each policy meeting how foreign exchange moves affect our economic, price forecasts and risks," Ueda reiterated. After falling more than 1% on Friday, USD/JPY moves up and down in a narrow band at around 154.50 on Monday.

Gold remained under bearish pressure last week and dropped to its lowest level in nearly two months below $2,540 on Thursday. Following a quiet Friday, XAU/USD gains traction to begin the new week and recovers toward $2,600.