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Forex Today – Asian Session: Timid recovery of the Dollar awaiting key data on consumer inflation in the US.

Forex Today – Asian Session: Timid recovery of the Dollar awaiting key data on consumer inflation in the US.

The highlight of the Asian session will be the Chinese PMIs. Japan will publish Industrial Production, retail trade, consumer confidence and housing construction. Australian private credit data will also be published. Later, Eurostat will publish the Eurozone CPI. In the United States, key data such as core PCE and weekly jobless claims will be released, which could have a critical impact on the dollar.

Here’s what you need to know on Thursday, November 30:

He Dollar Index (DXY) rose modestly, recovering from monthly lows. The DXY could not hold above 103.00. It remains under pressure but offers some signs of stabilization, helped by US economic data. The US economy grew at an annualized rate of 5.2% during the third quarter, up from the previous estimate of 4.9%.

On Thursday, fundamental data will be published in the US, such as weekly jobless claims and, above all, the basic personal consumption price index for October. The latter is expected to show a further slowdown in consumer inflation, with the annual rate of the core CPI decreasing from 3.4% to 3%. Chicago PMI and pending home sales will be released later.

Yields in the US continue to decline, while German and even UK bond yields fell further. The divergence supported the dollar, but gains were limited amid risk appetite.

The EUR/USD pair fell after four consecutive days of rises, unable to stay above 1.1000. The pair found support around 1.0960, and the risk remains tilted to the upside. The Euro did not benefit from inflation data from Germany and Spain, which slowed more than expected.

Commerzbank analysts on German inflation:

November’s decline is mainly due to a significantly lower core inflation rate, while the contribution from energy and food was limited. In the next two months, the inflation rate is likely to be slightly higher again due to a series of special effects. In the longer term, the decisive factor will be the extent to which companies are able to pass on their higher wage costs to their customers. We assume that this effect will stabilize the core inflation rate well above the ECB’s target in the coming year.

The Eurozone Consumer Price Index will be published on Thursday. The annual rate is expected to show an increase of 3.9%, down from 4.2% recorded in October. However, a reading below market consensus should not be surprising. Germany will report retail sales for October and the unemployment rate for November.

The GBP/USD pair ended sideways, just below 1.2700, after reaching three-month highs of 1.2732. The Pound also advanced against the Euro, with EUR/GBP falling below 0.8650. The Swiss franc outperformed on Wednesday.

The USD/JPY fell sharply and hit 146.68, its lowest level in two months, before bouncing towards 147.30. Industrial production, retail sales, housing construction and consumer confidence will be released in Japan on Thursday.

Of importance for antipodean currencies and overall sentiment, China will release NBS PMIs, which are expected to show improvement in both manufacturing and non-manufacturing indices.

USD/CAD bounced off the 100 SMA and rose again to 1.3600. The bias is bullish, but the pair is trading around a strong support level. Canada will report third-quarter GDP data and monthly growth numbers for September on Thursday.

TD Securities Analysts on Canada GDP:

We expect flat GDP in the third quarter, reflecting other weak results for households and a large drag on residential investment, which is well below BoC forecasts of +0.8% and should reinforce expectations that the Bank has finished tightening its monetary policy. Manufacturing GDP should be a little more optimistic, up 0.1%, but this will be accompanied by another weak preliminary estimate for October, which will put fourth quarter growth below 1%.

The AUD/USD pair rose to its highest level in almost four months and then retreated as the US dollar regained strength. The pair remained above 0.6600. Australia will report private sector credit for October on Thursday.

NZD/USD posted its highest daily close since late July, at 0.6150, but finished far from the top. Following the hawkish Reserve Bank of New Zealand, the pair peaked above 0.6200. The pullback casts doubt on further near-term gains. On Thursday, New Zealand will release building permit data, and the ANZ business confidence report will also be released.

Crude oil prices rose 1.75% in a volatile session. The barrel of WTI closed near daily highs, slightly below $78.00, amid speculation about the outcome of Thursday’s meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+).

He Gold It posted modest daily highs but failed to break above $2,050, despite falling government bond yields. Silver ended sideways around $25.00.


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Source: Fx Street