Dollar trades narrowly due to U.S. Thanksgiving holiday: Nov 27, 2015

Market Review - 26/11/2015 22:13GMT 
 
Dollar trades narrowly due to U.S. Thanksgiving holiday

The greenback held steady against the other major currencies in thin trading on Thursday as expectations for a December rate hike by the Federal Reserve continued to support the U.S. dollar.

Versus the Japanese yen, U.S. dollar met renewed selling at 122.78 in Australia and then fell to 122.55 in Asia. Later, despite a brief rebound to 122.70 in European morning, price retreated to 122.50 and then move sideways in holiday-thinned North American session with U.S. markets closed for the Thanksgiving holiday.

The single currency were little change versus the greenback in holiday-thinned North American session on Thursday. During the day, the single currency edged lower from Asian high of 1.0628 and then dropped to 1.0600 in European morning before climbing back to 1.0620 near European closing, then moved sideways in North America.

Elsewhere, cable went through a mini 'roller-coaster' session on Thursday. Despite a brief rebound from 1.5115 to 1.5132 in Asia, selling interest below previous session high at 1.5136 checked intra-day gain there and price ratcheted lower after European open, falling to a session low of 1.5066 before renewed cross demand in sterling lifted price to 1.5128 in holiday-thinned North American session.

On the data front, data showed that New Zealand's merchandise trade deficit widened slightly in October from a year earlier, as a sharp fall in the value of overseas shipments of milk powder weighed on exports. The country recorded a NZ$963 million deficit for the month and a NZ$3.24 billion shortfall for the 12 months to October.

Reuters news reported on Thursday that European Commission advised Germany and the Netherlands, which have big current account surpluses, should invest more to help boost economic growth and inflation in the whole euro zone. The Commission said 'The risk of protracted low growth and low inflation at euro-area level should be mitigated especially by countries that are better placed to boost investment; This is the case of Germany and the Netherlands whose current account surpluses are forecast to remain high in the coming years; The persistence of sizeable current account surpluses in countries with relatively low deleveraging needs implies large savings and investment imbalances, pointing to a misallocation of resources; A reduction of surpluses in countries with relatively low deleveraging needs would bring a much needed improvement in demand in the euro area and help ease the trade-off faced by highly indebted countries.'

Data to be released on Friday:

Japan jobs/applicants ratio, unemployment rate, household spending, CPI reports, New Zealand business outlook, U.K. consumer confidence, national house price, Germany import price index, consumer sentiment, France consumer spending, producer prices, Italy business confidence, consumer confidence, EU business climate, inflation expectation, consumer confidence, economic sentiment, industrial sentiment, service sentiment, selling price expectation, Canada producer prices, raw material prices.