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

Dhwani Mehta FXStreet

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	Consensus	Previous
Saturday, Nov 03
24h	JPY Culture Day
Tuesday, Nov 06
24h	USD US Mid-term Elections
Thursday, Nov 08
06:45	CHF Unemployment Rate s.a (MoM)	2.5%	2.5%
07:00	EUR Imports (MoM)	0.8%	-2.7%
07:00	EUR Trade Balance s.a.	€18.0B	€18.3B
07:00	EUR Exports (MoM)	0.3%	-0.1%
09:00	EUR Economic Bulletin
n/a	EUR European Commission Releases Economic Growth Forecasts
13:15	CAD Housing Starts s.a (YoY)	200K	189K
13:30	USD Initial Jobless Claims	214K	214K
13:30	USD Continuing Jobless Claims	1.635M	1.631M
13:30	CAD New Housing Price Index (YoY)		0.4%
13:30	CAD New Housing Price Index (MoM)	0.1%	0.0%
14:15	EUR ECB Cœuré Speech
15:20	EUR ECB President Draghi's Speech
15:30	USD EIA Natural Gas Storage change		48B
17:30	CHF SNB Gov Board Member Maechler Speech
19:00	USD Fed's Monetary Policy Statement
19:00	USD Fed Interest Rate Decision	2.25%	2.25%
23:50	JPY Money Supply M2+CD (YoY)		2.8%
Friday, Nov 09
00:30	AUD Home Loans		-2.1%
00:30	AUD Investment Lending for Homes		-1.1%
00:30	AUD RBA Monetary Policy Statement
01:30	CNY Consumer Price Index (YoY)	2.5%	2.5%
01:30	CNY Consumer Price Index (MoM)	0.2%	0.7%
01:30	CNY Producer Price Index (YoY)	3.4%	3.6%
04:30	JPY Tertiary Industry Index (MoM)		0.5%

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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