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The greenback continued its fall from Thursday as rate hike expectations lowered following softer CPI data. The BoJ is expected to shift its policy next week on the 18th as the JGB yields maintained their rally beyond the cap. Investors focus on earnings reports from US banks. Coming up today, Traders should pay close attention to Michigan Consumer Expectations, US Barker Oil Rig Count, and a speech from FOMC’s Harker.
USDJPY tumbled by -0.56% to levels last seen in May on a weaker dollar. The greenback depreciated late Thursday following a slump in US CPI data to 6.5% year-on-year, trimming rate hike expectations to 25bps from the initially anticipated 50bps. The Japanese Yen found support from market pricing in a policy normalization by the BoJ after the JGB yields broke above the central bank`s ceiling of 0.5%. The pair continued its slide from 129.50 and still needed to breach 128.00 for an extended slide.
GBPCHF gained +0.25% following mixed economic data from the UK. The country’s GDP printed a 0.1% month-over-month vs -0.3% survey although the yearly reading came a bit lower than anticipated at 0.2% vs 0.3%. Industrial production in Britain showed some activities in November settling at -0.2% vs -0.3% while the Manufacturing Production sector slumped to -0.5% against the -0.2% anticipated. Adding on, UK’s trade balance fell to -15.62 billion vs -14.90 billion. Further up bulls may face a price cap at 1.1400 and 1.1580.
EURAUD lost -0.24% in the mid-European trade session with a number of factors supporting the AUD. In the Asian session, Australian Home Loans came in at -0.2% vs -0.3% showing an increase in demand in the housing sector. An increase in risk appetite helped the commodity-linked AUD find support on the day. China’s upbeat trade balance data also aided the AUD as one of the biggest trade partners to China. Headline CPI in France and Spain tanked to 5.9% and 5.7% respectively. Losses may be limited by upbeat Industrial production at 1.0% vs -1.9% and Trade balance at -11.7B VS-21.1B in the Eurozone. Downside momentum may continue if the 1.5400 low fails to hold.
European equities were in positive regions as UK growth soared in November. Growing optimism in China helped shrug off the highly anticipated economic slowdown in Europe as many European companies get to do business with the second-largest economy in the world. The UK100 was up +0.23% as it closed in on May 2018 highs. The CAC40 gained +0.12% with a few ticks away from 7050, February 2022 high. The DAX was up +0.08% in a range between 15050 low and 15136 high on the day.
US stock futures traded in a mixed fashion ahead of the US banks’ earnings reports. As of 13:15 [GMT+2] the DJIA futures were up +0.13% from 34100. The S&P 500 futures lost -0.05% slightly below 4000. Nasdaq 100 futures were down -0.17% as Tesla slumped after cutting electric vehicle prices in Europe and America up to 20%. Bears may seek 11300 on an extended slide.
Additionally, Crude oil got boosted by upbeat data from China and a weaker dollar. The positive trade balance data showed an increasing demand for the black liquid. Brent was up +1.17% with targets at $86.00 and $88.00. US oil gained +1.14% trading above $79.00.
