USD
The US dollar gave up some of its recent gains to its major rivals when pending home sales came in weaker than expected. The report printed a 0.6% decline for October even when analysts were projecting a 2.2% rebound from the previous 4.6% decline.
This marked the report’s 6th consecutive monthly decline, which means that purchases were falling for half a year already. Up ahead, we have CB consumer confidence data and an improvement from 71.2 to 72.2 is eyed. A strong figure might mean more gains for the US dollar.
EUR
The euro chalked up losses against some of its counterparts yesterday when ECB official Hansson spoke of further rate cuts. There were no economic reports released from the euro zone yesterday and there are none lined up for today so it should be interesting to see whether remarks from more ECB officials could influence euro price action.
GBP
The pound was rejected at the 1.6250 level versus the dollar, as this minor psychological resistance lines up with the top of a long-term range. UK BBA mortgage approvals were weaker than expected at 42.8K versus the estimated 43.2K to 45.2K. Inflation report hearings are set for today and weaker inflation estimates could lead traders to believe that the central bank has room to ease if needed.
CHF The franc was able to hold on to its recent gains, although it gave up a few against the US dollar. Swiss employment level was slightly better than expected at 4.20M, up from the previous 4.17M reading. There are no reports due from Switzerland today so it could be all about risk sentiment driving franc pairs and US data moving the USD/CHF pair.
JPY
The yen was able to recover against some of its major counterparts, as traders probably booked profits off some of their yen short positions. In addition, the release of the BOJ meeting minutes today revealed that some policymakers are concerned about downside price pressures. They also pointed out that there are plenty of risks to export growth, which might then weigh on overall economic performance later on. There are no other reports due from Japan today.
Commodity Currencies (AUD, NZD, CAD)
The comdolls still gave way to dollar strength, although AUD/USD and NZD/USD showed signs of retracing. RBA official Lowe noted that the Aussie is trading at historically high levels and did not rule out a central bank intervention. There are no reports due from Canada as the Loonie might keep reacting to falling oil prices. Meanwhile, New Zealand has its trade balance on tap for the next Asian trading session. A wider deficit is expected, which might then give RBNZ officials a chance to reiterate their views on the overvalued Kiwi.
By Kate Curtis from Trader’s Way
