Yen Falls as Stocks Rise, US Dollar May Decline as FOMC Looms
- Yen drops as ECB stimulus boost sends global shares upward
- Lull in key event risk may make for quiet end to trading week
- US Dollar may decline in pre-positioning for FOMC meeting
The Japanese Yen underperformed in otherwise quiet overnight trade as most Asian stocks advanced, putting pressure on the perennial anti-risk currency. Regional shares followed Wall Street higher after the ECB expanded its monetary stimulus effort.
Mario Draghi and company extended QE asset purchases to run through 2017 from the previous end date at the end of March. The size of monthly asset purchases was lowered from €80 to €60 billion in the nine months from April through December.
The markets’ baseline expectation ahead of the ECB policy announcement favored a 6-month extension that kept the current pace of uptake unchanged. Compared to this, the central bank’s new scheme amounts to a net €60bnin additional accommodation.
From here, a quiet data docket in European and US trading hours argues for congestion as markets digest recent volatility. A US Dollar pullback may be in the cards amid pre-positioning for next week’s FOMC announcement as traders weigh the possibility that the Fed’s 2017 outlook will be more timid than their own.
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|21:45||NZD||Card Spending Retail (MoM) (NOV)||-0.1%||0.40%||0.5%|
|21:45||NZD||Card Spending Total (MoM) (NOV)||-0.3%||-||0.6%|
|23:50||JPY||BSI Large All Industry (QoQ) (4Q)||3||-||1.9|
|23:50||JPY||BSI Large Manufacturing (QoQ) (4Q)||7.5||-||2.9|
|23:50||JPY||Money Stock M2 (YoY) (NOV)||4.0%||3.7%||3.7%|
|23:50||JPY||Money Stock M3 (YoY) (NOV)||3.4%||3.2%||3.1%|
|0:30||AUD||Home Loans (MoM) (OCT)||-0.8%||-1.0%||1.5%|
|0:30||AUD||Investment Lending (OCT)||0.7%||-||5.1%|
|0:30||AUD||Owner-Occupier Loan Value (MoM) (OCT)||-0.8%||-||0.8%|
|1:30||CNY||CPI (YoY) (NOV)||2.3%||2.2%||2.1%|
|1:30||CNY||PPI (YoY) (NOV)||3.3%||2.3%||1.2%|
|6:45||CHF||Unemployment Rate (NOV)||3.3%||3.2%||Medium|
|6:45||CHF||Unemployment Rate SA (NOV)||3.3%||3.3%||Medium|
|7:00||EUR||German Trade Balance (OCT)||22.0b||24.2b||Medium|
|7:00||EUR||German Current Account Balance (OCT)||22.0b||24.2b||Medium|
|7:00||EUR||German Exports SA (MoM) (OCT)||0.9%||-1.2%||Low|
|7:00||EUR||German Imports SA (MoM) (OCT)||1.1%||-0.7%||Low|
|7:00||EUR||German Labor Costs WDA (YoY) (3Q)||-||1.8%||Low|
|7:00||EUR||German Labor Costs SA (QoQ) (3Q)||-||0.2%||Low|
|7:45||EUR||French Budget Balance YTD (OCT)||-||-83.0b||Low|
|7:45||EUR||French Industrial Production (MoM) (OCT)||0.6%||-1.1%||Low|
|7:45||EUR||French Industrial Production (YoY) (OCT)||-0.6%||-1.1%||Low|
|7:45||EUR||French Manufacturing Production (MoM) (OCT)||0.7%||-1.1%||Low|
|7:45||EUR||French Manufacturing Production (YoY) (OCT)||0.1%||-0.9%||Low|
|9:30||GBP||Visible Trade Balance (£/Mn) (OCT)||-11800||-12698||Medium|
|9:30||GBP||Trade Balance Non EU (£/Mn) (OCT)||-3450||-3969||Medium|
|9:30||GBP||Trade Balance (£/Mn) (OCT)||-4300||-5221||Medium|
|9:30||GBP||Construction Output SA (MoM) (OCT)||0.2%||0.3%||Low|
|9:30||GBP||Construction Output SA (YoY) (OCT)||-0.1%||0.2%||Low|
|9:30||GBP||BoE/TNS Inflation Next 12 Mths (NOV)||-||2.2%||Low|
|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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