US Dollar Extends Gains as Fed Commentary Comes Back in Focus
- US Dollar continues to rise as post-election trends remain in play
- Japanese Yen declines as Nikkei gains, denting anti-risk demand
- Sanguine, hawkish-leaning Fed-speak may add fuel to USD rally
Trends prevailing after Republican nominee Donald Trump unexpectedly won the US presidential election remained in play at the start of the trading week. The markets are betting that the on-coming US policy pivot may boost corporate earnings and stoke inflation. The former conclusion has proven supportive for share prices while the latter fueled speculation of a steeper Fed rate hike trajectory, driving the US Dollar upward.
At first blush, overnight price action appeared to deliver more of the same. The greenback pushed higher against its major currency counterparts, moving alongside surging US Treasury bond yields. The anti-risk the Yen proved weakest on the session as Japan’s benchmark Nikkei 225 stock index followed S&P 500 futures upward.
The upbeat mood was not universally felt however. Indeed, the overall MSCI Asia Pacific regional benchmark equities gauge declined amid worries about the President-elect’s position on free trade. Investors fear that the emergence of new trade barriers will hurt export-oriented emerging market economies as well as their commodity-producingsuppliers.
Looking ahead, a light offering on the economic data front seems likely to put Fed-speak in the spotlight. Comments from Rob Kaplan, Jeff Lacker and John Williams – Presidents of the US central bank’s Dallas, Richmond and San Francisco branches – are due to cross the wires. Rhetoric echoing the cautiously hawkish tone prevailing before the election may feed continuation of moves that have emerged thereafter.
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|20:30||NZD||REINZ House Sales (YoY) (OCT)||-14.2%||-||-9.5%|
|23:50||JPY||GDP SA (QoQ) (3Q P)||0.5%||0.2%||0.2%|
|23:50||JPY||GDP Annualized SA (QoQ) (3Q P)||2.2%||0.8%||0.7%|
|23:50||JPY||GDP Nominal SA (QoQ) (3Q P)||0.2%||-0.1%||0.1%|
|23:50||JPY||GDP Deflator (YoY) (3Q P)||-0.1%||0.3%||0.7%|
|23:50||JPY||GDP Private Consumption (QoQ) (3Q P)||0.1%||0.0%||0.1%|
|23:50||JPY||GDP Business Spending (QoQ) (3Q P)||0.0%||0.2%||-0.1%|
|0:01||GBP||Rightmove House Prices (MoM) (NOV)||-1.1%||-||0.9%|
|0:01||GBP||Rightmove House Prices (YoY) (NOV)||4.5%||-||4.2%|
|0:30||AUD||Credit Card Purchases (SEP)||-||-||A$26.8b|
|0:30||AUD||Credit Card Balances (SEP)||-||-||A$51.3b|
|1:00||JPY||BOJ Kuroda speaks in Nagoya||-||-||-|
|2:00||CNY||Industrial Production (YoY) (OCT)||6.1%||6.2%||6.1%|
|2:00||CNY||Industrial Production YTD (YoY) (OCT)||6.0%||6.1%||6.0%|
|2:00||CNY||Retail Sales (YoY) (OCT)||10.0%||10.7%||10.7%|
|2:00||CNY||Retail Sales YTD (YoY) (OCT)||10.3%||10.4%||10.4%|
|2:00||CNY||Fixed Assets Ex Rural YTD (YoY) (OCT)||8.3%||8.2%||8.2%|
|4:30||JPY||Industrial Production (MoM) (SEP F)||0.6%||-||0.0%|
|4:30||JPY||Industrial Production (YoY) (SEP F)||1.5%||-||0.9%|
|4:30||JPY||Capacity Utilization (MoM) (SEP)||-2.0%||-||2.6%|
|8:15||CHF||Producer & Import Prices (MoM) (OCT)||0.2%||0.3%||Low|
|8:15||CHF||Producer & Import Prices (YoY) (OCT)||-0.1%||-0.1%||Low|
|9:00||CHF||Total Sight Deposits||-||518.6b||Low|
|9:00||CHF||Domestic Sight Deposits||-||451.8b||Low|
|10:00||EUR||Eurozone Industrial Production SA (MoM) (SEP)||-1.0%||1.6%||Medium|
|10:00||EUR||Eurozone Industrial Production WDA (YoY) (SEP)||0.9%||1.8%||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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