The following information is important for Friday, November 17:
The financial markets remained relatively quiet for a third consecutive Friday due to a lack of fundamental drivers. US economic data will include Housing Starts and Building Permits, while Eurostat will release revisions to the October Harmonized Index of Consumer Prices (HICP).
Despite the uninspiring data releases from the US on Thursday, the US Dollar (USD) struggled to build on Wednesday’s recovery gains. Initial jobless claims increased by 13,000 to 231,000 during the week ending November 11, and according to the Federal Reserve’s monthly report, industrial production declined by 0.6% in October after growing by 0.1% in September. While Wall Street’s main indexes closed virtually unchanged on Monday, the benchmark 10-year US Treasury bond yield dropped toward 4.4%.
Euro (EUR) Firms as Market Mood Sours
Yesterday, the Euro (EUR) rose against its more risk-sensitive counterparts as market sentiment turned bearish.
A pullback in the US Dollar (USD) also helped to support the Euro since EUR and USD have a strong negative correlation.
In this morning’s interview with Bloomberg, European Central Bank (ECB) President Christine Lagarde is expected to make dovish comments and confirm a European inflation decline. Could she weigh heavily on EUR exchange rates if she makes dovish comments and confirms the sharp drop in inflation?
Pound (GBP) Attempts Modest Recovery
After Wednesday’s slower inflation report, Sterling (GBP) moved higher against its weaker rivals yesterday, recouping some of its losses.
As a result of Megan Greene’s hawkish comments, the British pound may have remained stable. Greene expressed concern about the persistence of UK inflation and delayed any rate reduction.
According to new data released this morning, retail sales in the UK fell by 0.3% last month, as opposed to a rise of the same amount. Sterling collapsed in response to the disappointing news.
US Dollar (USD) Undermined by Weaker Data
Yesterday, a deterioration in market sentiment led to a reversal of gains in the safe-haven US Dollar.
As expected, US jobless claims and industrial production both surpassed expectations. Unemployment claims rose, and industrial production fell.
Several Fed officials, including Michael Barr and Austan Goolsbee, will be speaking today. Could a dovish consensus cause the USD to dwindle?
USD/JPY slides below 150.00 as yields continue to fall
Due to continued Treasury yield declines, the pair has dropped below 150.00, its lowest level since last Monday. The 10-year bond yield is now down 6 basis points to 4.385%, dragging the dollar down as USD/JPY is the notable mover today, down over 100 points.
Canadian Dollar (CAD) Drops as Oil Prices Slide
A sharp decline in oil prices yesterday contributed to the Canadian Dollar (CAD) decline.
Canadian Dollar exchange rates could be impacted by oil price dynamics today. If crude weakens further, the Canadian Dollar could become more vulnerable.
Australian Dollar (AUD) Rangebound Amid Quiet Trade
As a result of a lack of Australian data and a muted market mood last night, the Australian Dollar (AUD) trades in a narrow range.
New Zealand Dollar (NZD) Dented as Commodity Prices Drop
As a result of a decline in some commodities important to the New Zealand economy, the New Zealand Dollar (NZD) declined overnight.
