What you need to know on Thursday, November 18:
The recent rally in the US dollar lost steam on Wednesday, and the DXY fell back to 95.80 at the end of the US session, having touched new 16-month highs at 96.26 in early Asian session trading. The White House said the final decision on the Fed chain’s nominee would be made before Thanksgiving (Nov. 25 or next Thursday).
Mixed US housing data failed to propel the dollar higher, as did positive retail sales, the Fed’s regional manufacturing survey, and consumer price inflation data in recent sessions. US yields fell slightly, falling 2 basis points back to 1.60%.
The JPY was the best performing G10 currency, gaining 0.6% against the dollar as US-Japan rate spreads approached. USD / JPY fell sharply from the previous session highs near 1.1500, the pair’s highest level since the first quarter of 2017, to test 1.1400.
The British pound was the second best performer, gaining 0.4% against the USD, pushing GBP / USD above a key downtrend that has been limiting price action since late October. GBP / USD gains have stopped at the 1.3500 level for now, but technical indicators will see a move towards the next key resistance at 1.3600.
UK inflation data was higher than expected, with the Consumer Price Index rising at its fastest year-on-year pace in more than 10 years to 4.2% in October, underpinning aggressive bets from the Bank of England and the British pound. sterling. The news flow on Brexit has also been positive, with the UK and the EU reportedly on the cusp of a deal on the movement of medicines in and out of Northern Ireland.
Consumer price inflation data was also released from Canada and also showed that price pressures are growing there as well, although this did not come with the help of the CAD, which was hit on Wednesday amid a sharp drop in prices. crude oil prices. USD / CAD hit new seven-week highs above 1.2600, a 0.4% gain on the day.
But the loonie was not the worst-performing G10 currency on the day. That title went to the AUD, with AUD / USD shedding 0.6% and hitting fresh six-week lows below 0.7260 as the pair continues to slide within a downtrend channel. Moderate third-quarter Australian wage growth data supported the RBA’s dovish stance and undermined the case for rate hikes next year, which weighed on the Australian dollar.
EUR / USD remained subdued after recovering from its previous session slide to 16-month lows at 1.1260 and settled to end the day modestly lateralized above the 1.1300 level. US stocks were mixed, with the S&P 500 declining modestly from 4,700, but holding very close to the all-time highs that touched above 4,720 earlier in the month.
The lyre continued to fall. USD / TRY rose to new record highs above 10.60, a 2.6% gain on the day, as investors continue to withdraw their bets on the lira amid concerns that the CBRT is sleepwalking into hyperinflation. The bank is expected to cut interest rates by another 100 basis points on Thursday to 15%, despite inflation approaching 20% ​​in October.
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