- RBNZ cuts rates as expected
- Americans heading home for the holidays.
- US dollar trading defensively
USDCAD open: 1.4086, overnight range 1.4068-1.4105, close 1.4101, WTI 57.94, Gold 4159.73
The Canadian dollar squeezed higher on the back of widespread US selling pressure. Yesterday US retail sales numbers were soft and despite the data being stale, trader reacted by boosting the odds for a December rate cut.
WTI oil prices traded in a 57.67-58.30 band weighed down by Opec production increases. Traders are also concerned about Russian crude returning (legally) to the market in an environment that is already oversupplied.
It’s Thanksgiving Day eve in and that means, heavier traffic, packed train stations, and overflowing airports as an estimated 82 million people are heading home for the holidays. FX trading will be volatile in holiday thinned markets.
There are plenty of US data releases today but most are stale and the quality of the others is questionable.
Asian equity markets finished higher. Australia’s ASX 200 rose 0.81%, Japan’s Topix climbed 1.96%, and Hong Kong’s Hang Seng finished with a 0.13% gain.
As of 7:15 am, the FTSE 100 is 0.24% higher, the CAC-40 has added 0.40%, and the DAX is up 0.25%. S&P 500 futures are firmer by 0.14%. The US Dollar Index is 99.85, and the US 10-year Treasury yield is 4.012$.
EURUSD traded in a 1.1563-1.1596 range and climbed on broad US dollar softness following Tuesday’s weak US data. The pair also saw interest after reports suggested Ukraine may face pressure to consider a peace outline rooted in a Russian document originally shared with US officials years ago.
GBPUSD traded in a 1.3158-1.3198 range as traders consolidated Tuesday’s gains. The move reflected a softer US dollar and positioning ahead of the UK’s Autumn budget, which is set for release at 7:30 am ET and could create a volatile session for the pound.
USDJPY traded in a 155.65-156.51 range and is sitting near the top of that band. Selling linked to speculation about a December BoJ rate hike is being overshadowed by Japan’s latest fiscal stimulus push. Recent communication from the BoJ Governor has hinted at higher rates, while Prime Minister Takaichi defended the stimulus as targeted and economically supportive.
AUDUSD traded in a 0.6465-0.6512 range and pushed higher after October inflation exceeded forecasts. Headline CPI reached 3.8 percent year over year and core rose to 3.3 percent, marking a fourth straight monthly increase. The results reduced expectations for an RBA rate cut next year, with some analysts even floating the possibility of a hike.
NZDUSD traded in a 0.5616-0.5697 range and jumped after the RBNZ delivered a widely expected 25 bp cut to 2.5 percent. Officials signaled that further easing is unlikely, giving the kiwi additional support.
