US Dollar May Reverse Drop as Markets Rethink Fed Rate Hike Chances
- US Dollar Drops as Fed Meeting Minutes Cast Doubt on December Rate Hike
- On-Coming Fed-Speak May Encourage Rethink of Imminent “Liftoff” Chances
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The US Dollar underperformed in overnight trade amid continued fallout following the release of minutes from October’s Fed policy meeting. The Australian and New Zealand Dollars outperformed as risk appetite firmed, driving the sentiment-linked currencies upward. The MSCI Asia Pacific regional benchmark stock index rose over 1 percent.
Traders latched on to comments from a dovish minority on the rate-setting FOMC committee that remained dubious about the likelihood of a December rate hike. That seemed to inspire hopes that liftoff may yet be delayed. This was presumably seen as supportive as markets continue to fear stimulus withdrawal at a time when overall global growth is slowing.
S&P 500 futures are pointing firmly higher in late Asian trade, hinting the risk-on mood is poised to carry forward. The move may swiftly fizzle however as cooler heads prevail over knee-jerk optimism. The Minutes document showed that almost all Fed officials agreed on a need to assess labor market strength. That seemed to set the stage for what was needed to cement rate hike chances. The subsequent 271k surge in nonfarm payrolls may have delivered precisely what Janet Yellen and company were looking for.
Scheduled commentary from Atlanta Fed President Dennis Lockhart and Fed Vice Chair Stanley Fischer – both of whom seemingly lean toward December liftoff based on recent commentary – may drive this point home in the hours ahead. That could trigger a swift reversal in the greenback’s fortunes, reversing overnight losses.
Losing Money Trading Forex? This Might Be Why.
|21:00||NZD||ANZ Job Advertisements (MoM) (OCT)||1.2%||-||2.3%|
|21:45||NZD||PPI Input (QoQ) (3Q)||1.6%||-||-0.3%|
|21:45||NZD||PPI Output (QoQ) (3Q)||1.3%||-||-0.2%|
|23:50||JPY||Trade Balance (¥) (OCT)||111.5B||-246.3B||-115.8B|
|23:50||JPY||Trade Balance Adjusted (¥) (OCT)||-202.3B||-343.1B||-309.8B|
|23:50||JPY||Exports (YoY) (OCT)||-2.1%||-2.0%||0.5%|
|23:50||JPY||Imports (YoY) (OCT)||-13.4%||-8.6%||-11.0%|
|00:30||AUD||RBA FX Transactions Government (OCT)||-579M||-||-785M|
|00:30||AUD||RBA FX Transactions Market (OCT)||516M||-||712M|
|00:30||AUD||RBA FX Transactions Other (OCT)||83M||-||89M|
|01:45||CNY||MNI Business Indicator (NOV)||49.9||-||55.6|
|03:17||JPY||BOJ Annual Rise in Monetary Base||¥80T||¥80T||¥80T|
|04:30||JPY||All Industry Activity Index (MoM) (SEP)||-0.2%||0.2%||-0.1%|
|05:30||JPY||Nationwide Dept Sales (YoY) (OCT)||4.2%||-||1.8%|
|05:30||JPY||Tokyo Dept Store Sales (YoY) (OCT)||7.4%||-||4.9%|
|06:00||JPY||Machine Tool Orders (YoY) (OCT F)||-22.9%||-||-23.1%|
|06:30||JPY||BOJ’s Kuroda Gives Press Conference||-||-||-|
|07:00||CHF||Trade Balance (OCT)||-||3.05B||Medium|
|07:00||CHF||Exports Real (MoM) (OCT)||-||0.2%||Low|
|07:00||CHF||Imports Real (MoM) (OCT)||-||2.6%||Low|
|08:00||EUR||ECB's Coeure Speaks in Frankfurt||-||-||Medium|
|08:30||EUR||ECB's Praet Speaks at Europe Finance Week||-||-||Medium|
|09:00||EUR||ECB Current Account SA (SEP)||-||17.7B||Low|
|09:00||EUR||ECB Current Account NSA (SEP)||-||13.7B||Low|
|09:30||GBP||Retail Sales Ex Auto Fuel (MoM) (OCT)||-0.6%||1.7%||Medium|
|09:30||GBP||Retail Sales Ex Auto Fuel (YoY) (OCT)||3.9%||5.9%||Medium|
|09:30||GBP||Retail Sales Inc Auto Fuel (MoM) (OCT)||-0.5%||1.9%||Low|
|09:30||GBP||Retail Sales Inc Auto Fuel (YoY) (OCT)||4.5%||6.5%||Low|
|11:00||GBP||CBI Trends Total Orders (NOV)||-10||-18||Low|
|11:00||GBP||CBI Trends Selling Prices (NOV)||-6||-7||Low|
|12:30||EUR||ECB Account of Monetary Policy Meeting||-||-||Medium|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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