Talking Points:
- US Dollar corrects lower after longest win streak in three years
- Japanese Yen under pressure as most stocks rise in Asian trade
- Trump economic team appointments may rattle global markets
The US Dollar corrected lower against most of its major counterparts in overnight trade. The move appeared to be corrective after the greenback rose for ten consecutive days against its major counterparts, marking the longest winning streak in over three years. The relentless advance has reflected a sharp steepening of the projected Fed rate hike trajectory following the US presidential election.
It was the Japanese Yen that underperformed however, moving broadly lower against the other majors. Most Asian stock indexes pushed higher, putting pressure on the perennial anti-risk currency. Sentiment trends overshadowed the release of October’s trade figures, where an overall balance that was little changed compared with the prior month was nonetheless disappointing relative to expectations of a larger surplus.
Looking ahead, the absence of top-tier scheduled event risk in European and US trading hours suggests that establishment momentum will find few roadblocks to disrupt continuation. S&P 500 futures are pointing higher, hinting that well-supported risk appetite will continue to bode ill for the Yen. Meanwhile the greenback may continue to retreat as investors digest recent gains.
The consolidative mood may prove short-lived however. Markets remain decidedly vulnerable to headline risk as US President-elect Trump continues to fill out his cabinet. Investors are keen to see who will implement the new administration’s economic policy program, particularly as Treasury Secretary. A big-splash announcement may swiftly snap markets out of corrective mode.
See the schedule of upcoming webinars and join us LIVE to follow the financial markets!
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 18:50 | JPY | Trade Balance (OCT) | ¥496.2b | ¥610.0b | ¥497.6b |
| 18:50 | JPY | Trade Balance Adjusted (OCT) | ¥474.3b | ¥404.3b | ¥358.5b |
| 18:50 | JPY | Exports (YoY) (OCT) | -10.3% | -8.5% | -6.9% |
| 18:50 | JPY | Imports (YoY) (OCT) | -16.5% | -16.1% | -16.3% |
| 21:00 | NZD | Credit Card Spending (MoM) (OCT) | 2.8% | - | 3.2% |
| 21:00 | NZD | Credit Card Spending (YoY) (OCT) | 10.2% | - | 8.5% |
| 23:30 | JPY | All Industry Activity Index (MoM) (SEP) | 0.2% | 0.0% | 0.2% |
| 0:00 | JPY | Supermarket Sales (YoY) (OCT) | 0.6% | - | -3.2% |
| 2:00 | JPY | Convenience Store Sales (YoY) (OCT) | 0.2% | - | 0.0% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 3:00 | CHF | Money Supply M3 (YoY) (OCT) | - | 3.0% | Low |
| 4:00 | CHF | Total Sight Deposits | - | 519.9b | Low |
| 4:00 | CHF | Domestic Sight Deposits | - | 449.8b | Low |
| 11:00 | EUR | ECB's Draghi Speaks at European Parliament | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0452 | 1.0526 | 1.0558 | 1.0600 | 1.0632 | 1.0674 | 1.0748 |
| GBP/USD | 1.2092 | 1.2226 | 1.2284 | 1.2360 | 1.2418 | 1.2494 | 1.2628 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
