During the Asian session, Australia’s Westpac Leading Index will be released and RBA Governor Bullock is due to speak again. Later in the day, attention turns to US dates ahead of the Thanksgiving holiday, which includes Unemployment claimsdurable goods orders and the University of Michigan Consumer Sentiment Survey.
Here’s what you need to know on Wednesday, November 22:
The US dollar rose on Tuesday in a move seen as corrective as the greenback remains vulnerable until the market’s focus shifts back to the growth story instead of the Federal Reserve (Fed) raising rates further.
The minutes from the FOMC indicated that members would consider it appropriate to further tighten monetary policy if “incoming information suggests that progress toward the committee’s inflation target is insufficient.” Participants also considered that it would be appropriate for policy to remain restrictive for some time until inflation clearly declines in a sustainable manner toward the Committee’s target.”
The US dollar index (DXY) bottomed at 103.17, its lowest level since August, before turning higher to rise above 103.50. The correction came as US yields remained flat.
US data due on Wednesday includes weekly Jobless Claims, Durable Goods Orders and the University of Michigan consumer sentiment survey. On Thursday, US markets will remain closed for Thanksgiving.
EUR/USD ended lower after being rejected from above 1.0950. Euro it lagged behind the decline in EUR/GBP, which fell towards 0.8700. Eurostat will publish consumer confidence data with preliminary November estimates.
The pound was among the best, helped by hawkish comments from Bank of England monetary policy members. GBP/USD posted its highest daily close since early September, above 1.2500. UK Chancellor Jeremy Hunt will deliver an autumn forecast statement focusing on tax and public spending decisions.
USD/JPY bottomed at 147.08 and rebounded to 148.30. The pair offers stabilizing signs.
Inflation data from Canada showed The Consumer Price Index (CPI) rose by 3.1% compared to the previous year.below the 3.2% market consensus and below the 3.8% recorded in October. The numbers suggest that inflation continues to moderate and has limited impact on the market.
TD Securities analysts on Canadian inflation:
The BoC’s preferred measure of core CPI slowed to 3.55% from 3.80% y/y for a new cycle low, but progress was even more pronounced on a 3m annual basis, falling to 2.96% from 3.7% . This represents a break below their recent range, which will add to the bank’s belief that policy is tight enough to bring inflation back to target. This could help set the tone for a change in tone from the BoC early next year, but the bank will still need to see further evidence of easing inflationary pressures.
USD/CAD it remains stagnant around 1.3700, indicating indecision. Bank of Canada Governor Tiff Mackle will speak on Wednesday.
The Australian dollar lagged despite a modestly hawkish Reserve Bank of Australia meeting minutes and comments from Governor Bullock. AUD/USD it reached the 200-day simple moving average and turned down, falling to the 0.6550 area. The trend remains upward. On Wednesday, Bullock will speak again; however, no surprises are expected.
Gold rose sharply despite steady returns, peaking at $2,007. It then pulled back to the $2,000 area. The critical level to break is $2,010.
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