American FX Outlook: An easy pre-Thanksgiving Tuesday

What you need to know

• The US Dollar is range bound against the major counterparts amid light news Tuesday.
• The UK public sector net borrowing rose slightly above expectations, while the Bank of England officials delivered testimony justifying Bank’s rate hike earlier in November.
• With Janet Yellen already announcing her resignation to the post of the Federal Reserve governor after Jerome Powell will take over in Fed, her public speeches are unlikely to contain major market moving features, including the University speech tonight. 

Tuesday’s market moving events

• UK Prime Minister Theresa May is meeting senior ministers to discuss Brexit bill offer.
• Canada’s wholesale prices are expected to rise 0.6% m/m in September.
• The US existing home sales are expected to rise 0.7% m/m in October to 5.43 million.
• ECB Executive Board member Benoit Cœuré is chairing Policy Panel “Economic convergence: before or beyond fiscal union” at ECB Conference “Public debt, fiscal policy and EMU deepening” in Frankfurt, at 15:00 GMT.
• The Fed chair Janet Yellen is due to due to participate in a panel discussion titled "In Conversation with Mervyn King" at the New York University Stern School of Business at 23:00 GMT.

Major market movers

• The EUR/USD dipped further and it is struggling at around $1.1715 as German politics weigh.
• The GBP/USD currency pair has tested repeatedly $1.3260 level but retreated back lower as the Brexit bill and the BoE’s Inflation report hearing master the rally. 

Earlier in Asia/Europe

• German politics are in the center of market attention with German President set to invite parties to see if there is a possibility of a coalition. On the other hand, Merkel is preferring new elections rather than a minority government, options new in German history. 
• The RBA minutes revealed “considerable uncertainty” on how quickly wages might pick up and add to inflation. The RBA expected GDP growth of around 3% over next few years, but subdued productivity.
• The RBA Governor Philip Lowe said it is “more likely” for Australian interest rates to go up than down from its all-time low. RBA Governor Lowe is confident that economy will pick up as expected, weakening the case for lower rates after negative spillovers from lower levels of mining investment are now fading.
• The UK public sector net borrowing increased by £0.5 billion to £8.0 billion in October 2017, compared with October 2016.
• Bank of England's Jon Cunliffe said during the Inflation report parliamentary hearing that the UK natural rate of unemployment is probably below 4.5%. Gertjan Vlieghe added that “if you wait until all the signs line up to support a rate rise, you will almost certainly be too late”.
• Bank of England's Cunliffe said the UK is not addicted to quantitative easing when the time comes it is likely to be unwound very slowly until the Bank rate is at 2%.