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.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.