Forex Today: US dollar extends post-US election recovery ahead of FOMC decision


Forex today in Asia was characterized by minimal volatility and tight trading ranges, as the dust settled over the US mid-term elections aftermath.  The US dollar staged a solid comeback across its major rivals, having almost reversed a Democrats win induced sell-off seen a day before. The USD/JPY traded firmer and headed for a test of the 113.85 barrier amid risk-on action on the Asian equities and higher Treasury yields. The Aussie also derived support from a big beat on the Chinese exports and imports data while improved risk appetite also underpinned. The Kiwi advanced, but remained capped below the 0.68 handle after the RBNZ left the cash rate unchanged and retained the dovish tone.

Among other majors, the EUR and the pound were buoyed by some optimism over the European politics while the Loonie benefited from a rebound in oil prices on fresh OPEC output cuts talks. Gold inched lower near 1225 level, slightly cautious heading into the FOMC rate decision.

Main Topics in Asia

Japan data sees Machine orders decline, Bank Lending contracts

BoJ Summary of Opinions: Inflation to increase "gradually"

RBNZ Gov Orr: Keeping stimulative policy for now

US Dem Pelosi: ready to pursue Trump oversight - Reuters

China to levy anti-dumping duties on rubber from S. Korea and Japan

China’s Oct trade balance (CNY): Exports and imports jump – a big beat

China’s October trade data (USD): Surplus expands 34.01bn, in line with estimates

US to impose new duties on Chinese aluminium sheet products - Reuters

Asian stocks up across the board as post-US election risk bid continue

Key Focus Ahead

A quiet EUR calendar this Thursday, sees the second-liner Swiss jobless rate at 0645 GMT, soon followed by the German trade balance at 0700 GMT. The EU economic bulletin, as well as the European Commission’s growth forecasts, will be published later in the European session.

The NA session remains eventful, with the Canadian housing data on the cards alongside the weekly US jobless claims release. Besides, speeches by the ECB President Draghi and Governing Council member Coeure will be due after 1400 GMT. The main event risk for today remains the FOMC monetary policy announcement due later at 1900 GMT.

EUR/USD: Indecisive breakout, focus on the FOMC rate decision

A close below 1.1395 looks likely as the Fed-ECB monetary policy divergence is set to grow further in the near future. The Fed is likely to keep rates unchanged today and signal a December rate hike.

GBP/USD trying to put in a floor at 1.3100 before stretching higher

Little data of note is slated for the economic calendar for Thursday, but GBP traders will be gearing up for the UK's GDP reading, due on Friday, and Brexit headlines continuing to leak out of the UK are suggesting that …

FOMC Preview & Post Election Outlook for the Dollar

With the US Midterm Elections behind us and the Democrats victory in the House the U.S. dollar ended the day lower against most of the major currencies. Looking ahead, we have a Federal Reserve monetary policy announcement on Thursday.

RBA SoMP: Expect no revisions to growth forecasts - HSBC

Analysts at HSBC offer a brief preview of Friday’s Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) due at 0030 GMT.

GMT
Event
Vol.
Actual
Consensus
Previous
Saturday, Nov 03
24h
 
 
Tuesday, Nov 06
24h
 
 
Thursday, Nov 08
06:45
 
2.5%
2.5%
07:00
 
0.8%
-2.7%
07:00
 
€18.0B
€18.3B
07:00
 
0.3%
-0.1%
09:00
 
 
n/a
 
 
13:15
 
200K
189K
13:30
 
214K
214K
13:30
 
1.635M
1.631M
13:30
 
 
0.4%
13:30
 
0.1%
0.0%
14:15
 
 
15:20
 
 
15:30
 
 
48B
17:30
 
 
19:00
 
 
19:00
 
2.25%
2.25%
23:50
 
 
2.8%
Friday, Nov 09
00:30
 
 
-2.1%
00:30
 
 
-1.1%
00:30
 
 
01:30
 
2.5%
2.5%
01:30
 
0.2%
0.7%
01:30
 
3.4%
3.6%
04:30
 
 
0.5%

 

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