Forex Today: USD extends reversal, AUD drops after jobs; ECB minutes & US data eyed

Haresh Menghani FXStreet

After yesterday's reversal from one-month high, sluggish US Dollar performance had been a key theme during Asian session on Thursday despite of Wednesday's strong US economic reports, record high levels for the US equity indices and rising treasury bond yields.

Lack of sustained follow through buying interest in wake of slightly cautious comments from the Fed Chair Janet Yellen, during the second day of her testimony before the House Financial Services Committee on Wednesday, seems to be primary drivers of the greenback's retracement on Thursday.

Meanwhile, the Australian Dollar reversed mixed jobs data led early gains as further details revealed that jobs growth was solely driven by part-time jobs, with a contraction in full-time jobs.

Against the backdrop of growing expectations for an eventual Fed rate-hike action, sooner-rather-than-later, market participants on Thursday would look forward to the US economic data featuring the release of housing starts, building permits, weekly jobless claims and Philly Fed manufacturing index. Meanwhile, ECB is scheduled to release the monetary policy meeting minutes during European trading session.

Main topics in Asia

Japanese MoF: didn’t discuss FX with US Treasury Secretary Mnuchin

Japanese Ministry of Finance (MoF) informed markets that a phone call between US Treasury Secretary Mnuchin and Japanese Finance Minister did not include a discussion on the exchange rate.

Fed’s Dudley calls stock market rally unusual

Fed’s Dudley calls the stock market rally unusual given the enormous rise in the policy uncertainty. Dudley sees Fed raising rates a little further in months ahead, as the inflation is seen moving towards Fed’s 2% objective.

EUR/USD jumps above 1.06 as the Treasury yields drop

The EUR/USD pair jumped to a session high of 1.0624 this Thursday morning on the back of a drop in the treasury yields.

Australian Jan employment headline upbeat, full-time jobs suffer sharp fall

Australia employment change s.a. came in at +13.5k in January, above forecasts of +10k and prior of 13.5k, with the unemployment rate s.a. at 5.7% vs forecasts of 5.8% and 5.8% last.

Key focus for the day ahead

GBP/USD - Rejected again at 1-hour 50-MA, is the pair overpriced?

GBP/USD fails again to take out the 1-hour 50-MA, marking the third failure at the moving average in the last twelve hours.

US and UK key data points, divergence of inflationary environment - ANZ

Analysts at ANZ noted that US Jan CPI beat expectations overnight at 2.5% y/y - its highest increase since March 2012.

S&P 500 - break of 2340-2346 would add weight to our bullish view – Natixis

Natixis Technical Research note sees a potential for a rally to 2360-2367 post a break above 2340-2346 levels.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold weakens further below $4,050 amid Fed rate hike bets and Iran risks

Gold sticks to intraday losses below the $4,050 level heading into the European session ,and for now seems to have snapped a three-day winning streak to the weekly top set the previous day. The US Dollar attracts fresh buyers after Wednesday's post-FOMC corrective slide from a two-week high and is seen as a key factor weighing on the precious metal.

US GDP expected to grow at 3.2% in Q3

The United States Bureau of Economic Analysis is set to publish its preliminary estimate of the Gross Domestic Product for the July-September period on Thursday, with analysts expecting the data to show annualised growth at a solid 3.2%, a decent improvement from the 2.2% expansion recorded in the previous quarter. Markets brace for US growth and PCE data amid geopolitical jitters

European Central Bank is expected to hold interest rates despite high inflation pressures

The European Central Bank concludes its two-day monetary policy meeting on Thursday and will announce its decision at 13:15 GMT. The bank is widely expected to leave the interest rate on the Main Refinancing Operations and the Deposit Facility unchanged at 2.65% and 2.50%, respectively, after having raised both of them by 25 basis points in September.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.