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We’re on day four of a quiet week on the European and North American economic calendars, leaving ample room for other factors to dominate traders’ attention. The Euro is taking a leg up on the European Commission’s report that 2017 GDP is due in at +2.2% from +1.7% previously expected; faster growth rates may allow the ECB to taper its QE program sooner than anticipated next year, opening the door perhaps for rate hikes to come a bit sooner than otherwise anticipated. Both the Japanese Yen and the Swiss Franc are gaining ground on the back of global equity markets taking a turn lower, a classic ‘risk-off’ move. Elsewhere, the US Dollar continues to focus in on the progress of tax reform legislation out of Washington, D.C.

DailyFX Economic Calendar: Thursday, November 9, 2017 – North American Releases

DailyFX US AM Digest: US Dollar Awaits Tax News; Banxico Meets Later

If there was one day this week that had a chance at leaving its footprint on FX markets, it would be today. While the North American economic calendar is still rather light – day four of the calendar being a non-factor – there is the Banxico rate decision at 14 EST/19 GMT. Banxico has paused in its rate hike cycle after turning sharply hawkish in 2016 to defend the Mexican Peso. Markets are currently pricing in August 2018 as the most likely period for the next rate move, which is expected to be a 25-bps cut.

DailyFX Webinar Calendar: Thursday, November 9, 2017

DailyFX US AM Digest: US Dollar Awaits Tax News; Banxico Meets Later

IG Client Sentiment Index Chart of the Day: USDJPY

DailyFX US AM Digest: US Dollar Awaits Tax News; Banxico Meets Later

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

USDJPY: Retail trader data shows 49.0% of traders are net-long with the ratio of traders short to long at 1.04 to 1. The number of traders net-long is 0.8% lower than yesterday and 12.7% higher from last week, while the number of traders net-short is 9.2% lower than yesterday and 10.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse lower despite the fact traders remain net-short.

Five Things Traders are Reading

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  3. “DXY Index Eying Test of Two-Week Range Lows” by Christopher Vecchio, CFA, Senior Currency Strategist
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  5. “Bitcoin Surges then Sinks as ’Segwit2x’ Fork is Called Off” by Christopher Vecchio, CFA, Senior Currency Strategist

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