USD holds above 200-DMA amid cautious sentiment – BBH

FXStreet Insights Team FXStreet

US Dollar (USD) is trading on the defensive and holding above its 200-day moving average. We get some second-tier US jobs check today with the ADP weekly employment preliminary estimate (1:15pm London, 8:15am New York) and sub-components of the November Conference Board consumer confidence index (3:00pm London, 10:00am New York), BBH FX analysts report.

September retail sales and PPI could influence dollar outlook

"Last week’s ADP report showed that for the four weeks ending November 1 private employers shed an average of -2,500 jobs a week, indicative of weak labor demand. In October, the Conference Board consumer report offered mixed readings on the labor market. The labor differential index (jobs plentiful minus jobs hard to get) improved slightly but consumers were more worried about the labor market outlook over the next six months."

"US September retail sales and PPI data are also due today (both at 1:30:pm London, 8:30am New York). The retail sales control group used for GDP calculation is projected at 0.3% m/m vs. 0.7% in August. Retail sales activity has held up well in the three months to August, growing at an above trend pace. However, the slowdown in labor demand points to looming pressure on household incomes and future consumption."

"We expect the Fed to deliver a follow-up 25bps cut to 3.50%-3.75% in December (77% priced-in) because restrictive Fed policy can worsen the fragile employment backdrop and upside risks to inflation have lessened. USD will likely consolidate recent gains ahead of the December 10 FOMC rate decision. But narrowing US-G6 rate differentials suggests the path of least resistance for USD is down."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.