What you need to know on Thursday, November 18:
The US dollar’s recent charge higher ran out of steam on Wednesday, with the DXY falling back to the 95.80s by the end of the US session having printed fresh 16-month highs at 96.26 in early Asia trade. The White House said a final decision on the Fed chain nominee would be made before Thanksgiving (25 November, or next Thursday).
Mixed US housing data failed to spur the greenback higher as positive retail sales, regional Fed manufacturing survey and Consumer Price inflation data did in recent sessions. US yields pulled back a little, with the dropping 2bps back to 1.60%, eroding the dollar’s rate advantage somewhat.
JPY was the best performing G10 currency, gaining 0.6% versus the buck as US/Japan rate differentials tightened. USD/JPY fell sharply lower from earlier session highs close to 1.1500, the pair’s highest level since Q1 2017, to test 1.1400.
Pound sterling was the second-best performer, gaining 0.4% versus USD, sending GBPUSD through above a key downtrend that has been capping the price action since the end of October. GBP/USD’s gains have been halted for now at the 1.3500 level, but technicians will eye a move towards the next key resistance at 1.3600.
UK inflation data was hotter than expected, with the Consumer Price Index rising at its quickest YoY pace in more than 10 years at 4.2% in October, supporting hawkish BoE bets and the pound. Brexit newsflow has also been positive, with the UK and EU reportedly on the cusp of agreement on the movement of medicine in and out of Northern Ireland.
Consumer Price Inflation data was also released out of Canada and also showed that price pressures growing there too, though this did not come CAD’s aid, which got battered on Wednesday amid a sharp drop in crude oil prices. USD/CAD hit fresh seven-week highs above 1.2600, up 0.4% on the day.
But the loonie wasn’t the worst performing G10 currency on the day. That title went to AUD, with AUD/USD losing 0.6% and hitting fresh six-week lows under 0.7260 as the pair continues to head lower within a bearish trend channel. Subdued Q3 Australian wage growth data supported the RBA’s dovish stance and undermined the case for rate hikes next year, weighing on the Aussie.
EUR/USD was subdued having recovered from its earlier session plunge to 16-month lows at 1.1260 and was set to end the day flat slightly above the 1.1300 level. US equities were mixed, with the S&P 500 dropping back modestly from 4700, but remains very close to the record highs it printed above 4720 earlier in the month.
In EM FX, the standout mover was the lira, which continued to plunge. USD/TRY rose to fresh record levels above 10.60, a gain of 2.6% on the day, as investors continue to dump the lira amid concerns that the CBRT is sleep walking into hyper inflation. The bank is expected to cut interest rates by another 100bps on Thursday to 15%, despite inflation nearing 20% in October.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.