USD
The US dollar gave up more gains yesterday when the US CB consumer confidence report printed weaker than expected results. The figure dipped from 72.4 to 70.4 instead of landing at the estimated 72.2 reading.
This shows that consumers are less optimistic about the US economy compared to the previous month, hinting at a potential downturn in spending later on. For today, US durable goods orders data is up and the headline figure is projected to show a 1.5% decline while the core figure could print a 0.5% uptick. Strong figures could help the dollar recover while another round of weak data could push it lower. Also due today is the initial jobless claims report since the U.S. will be on Thanksgiving holiday tomorrow.
EUR
The euro continued to climb against its major counterparts yesterday, despite more talks of negative deposit rates. There were no reports released from the euro zone but it appears that confidence in Germany, which is the region’s largest and strongest economy, is helping to keep the shared currency afloat. German GfK consumer climate data is up for release today and the index is slated to tick up from 7.0 to 7.1.
GBP
The pound was unable to make any headway past the .16200 mark yesterday as a dovish BOE inflation report hearing weighed on the currency. Carney clarified that the 7% unemployment rate target was a threshold and not an automatic trigger for monetary policy tightening. In fact, other policymakers echoed his cautious sentiment in saying that the central bank isn’t close to unwinding policy just yet. They cited weak domestic and global demand, along with the slack in business production and wage growth, as reasons for their careful assessment of the economy. UK’s second GDP estimate is up for release today and no revisions are expected from the 0.8% growth figure. UK quarterly business investment data is also due.
CHF
The franc took advantage of dollar weakness yesterday, although there were no reports released to provide support for the Swiss currency. Swiss UBS consumption indicator is lined up for today and it could show an improvement from the previous 1.56 reading. If that’s the case, the franc could be able to extend its gains. Otherwise, a bounce for USD/CHF might be in the cards.
JPY
The yen’s rally found legs yesterday when the Nikkei ended lower in Asian trading. Risk aversion seems to have supported the lower-yielding Japanese currency, as there were no reports released from Japan then. For today, Japan’s schedule is empty once again so yen trading might be sensitive to risk flows and Asian equity performance.
Commodity Currencies (AUD, NZD, CAD)
The Australian dollar continued its tumble in the charts when news of another major hedge fund liquidating its Aussie positions convinced traders to short the Aussie as well. The New Zealand dollar was also dragged down by this bearish news, although their trade balance triggered a quick bounce in today’s early Asian trading. No other reports are due from the comdoll economies today so it might be all about risk flows driving these currencies.
By Kate Curtis from Trader’s Way
