EUR/USD: Yellen May Spur Some Profit Taking Today

Philadelphia Federal Reserve President Patrick Harker said he favored raising interest rates and that the U.S. central bank might have to hike more aggressively if the incoming Trump administration enacts a fiscal stimulus. Harker does not have a vote on monetary policy this year but he will in 2017.
Cleveland Fed President Loretta Mester said the Federal Reserve must not overreact to market moves following the shock U.S. presidential election in part because it is too early to predict any new tax and spending policies, so the plan remains for gradual interest rate hikes.
Eurostat confirmed its earlier estimate that inflation last month was 0.5% yoy, up from 0.4% in September and 0.2% in August. The European Central Bank wants to keep inflation below, but close to 2% over the medium terms.
The dollar fell back against other major currencies on Thursday, hit by speculation U.S. Federal Reserve chief Janet Yellen will express concern over the pace of its surge and an accompanying rise in bond yields. That could spur some profit-taking on the bullish dollar positions.

Growth Aces Research Team Growth Aces

A rise in U.S. bond yields:

The dollar has ground its way higher this week after jumping in the days following Donald Trump's victory in the U.S. presidential election last Tuesday, fuelled by expectations a Trump White House would drive up inflation.
Yellen testifies to the congressional Joint Economic Committee from 15:00 GMT.
We are looking to take advantage of near-term recovery attempts. Immediate decent resistance comes in at 1.0816, Tuesday’s session high. We have raised our sell order to 1.0865, 14-day ema.

USD/CAD: Canada Need Not Move In Line With Fed

Deputy Governor of the Bank of Canada Timothy Lane speculated about the impact on Canada of a hypothetical Fed rate hike, saying there would be a tightening effect via higher market interest rates and a stimulative effect as a weaker Canadian dollar boosts export competitiveness. He added: “We are free to adjust our policy interest rates in the context of Canadian economic conditions - and, in particular, do not need to move in step with the Federal Reserve.”
In an apparent reference to the U.S. election of Donald Trump, Lane noted that market rates and capital flows have shifted sharply over the past week, "along with changing perceptions of the direction of the economic policies of the United States."
The 0.3% September increase in Canadian manufacturing sales topped market expectations for a gain of 0.1%, but a dip in volumes suggested slower overall economic growth heading into the fourth quarter.
Let’s take a look at oil, which is one of Canada's major exports. Oil prices steadied on Thursday as expectations of an OPEC deal to limit production were balanced by growing evidence of heavy oversupply and rising stocks, particularly in the United States. U.S. crude inventories rose by 5.3 million barrels in the week to November 11, well above forecasts of an increase of 1.5 million barrels, data from the U.S. Energy Information Administration showed on Wednesday. OPEC countries are due to meet on November 30 to discuss limits on production, and may even agree a cut in output in an attempt to push up prices, but data shows global supply continues to increase. Russia has expressed willingness to support an OPEC decision to freeze oil output, Russian Energy Minister Alexander Novak said, adding he might meet Saudi Arabia's Energy Minister Khalid al-Falih at a conference in Doha this week
The Canadian dollar strengthened against its U.S. counterpart. Long-term charts remain bullish though. We stay sideways on this pair as in our opinion no position is justified from risk/reward perspective.

Author

Growth Aces Research Team

Growth Aces

GrowthAces.com is an independent macroeconomic consultancy. They offer you daily forex analysis with forex signals for traders.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD pops to daily highs near 1.1430

EUR/USD starts the week on a positive note, climbing to as high as the 1.1430 zone, or daily tops, on Monday. The pair’s recovery comes in response to the broad-based US Dollar weakness, while investors continue to monitor developments from the Middle East ahead of the beginning of the ECB's annual forum.

Gold remains supported by $4,000

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.