The US dollar has been higher again today as the USD index continues to try and break out above recent highs, trading 98.32 last. Comments from Fed’s Powell earlier in the week have kept USD supported, backing up the view that the Fed will stay on hold in the near term. Expectations around a potential US/China trade deal continue to drive price action due to the moves in equities prices, which have softened a little over early trading on Friday.
Eurozone CPI Sees Upside Surprise
EURUSD has been under pressure today, as strength in the US dollar continues to weigh on the single currency. The latest CPI flash estimate for November came in higher than expected at 1% but still only halfway to the ECB’s 2% target, highlighting the remaining weakness in the economy. EURUSD trades 1.1004 last following some post-release volatility.
GBP Under Pressure
GBPUSD has been under pressure today as ongoing fluctuations in UK elections polls keep are fuelling uncertainty. The latest polls show the Conservative party are still in the lead, though without an overall majority as yet, meaning that a hung parliament is still the most likely outcome. GBPUSD trades 1.2887 last still above the 1.2782 level for now.
Risk Appetite Softens on Friday
Risk assets have softened a little over the last 24 hours as traders pair some risk into the US Thanksgiving weekend. Recent commentary from both sides has been supportive, encouraging expectations that a trade deal is due in the coming weeks. However, news that the US has backed a bill supporting the rights of Hong Kong protestors has added some risk given the division between the US and China over the issue. SPX500 trades 3146.73 last.
Oil Flat Following Bearish EIA Report
Oil prices have remained resilient into the end of the week. The EIA reported a further build in USD crude stores this week along with yet another record high in US crude production. The US & China expected to agree to a trade deal, however, and with OPEC expected to announce further production restrictions next week, crude has been able to offset downside. Crude trades 58.05 last.
Loonie Trading Higher
USDCAD has been a little higher today, given the strength in USD and subdued oil prices over the morning. Looking ahead today, CAD traders will be focusing on domestic GDP which is forecast to remain unchanged at 0.1% on the month. Any weakness might see a lift in BOC easing expectations ahead of the December meeting next week. USDCAD trades 1.3291 last.
AUD a Little Lower
AUDUSD trades .6777 last. Seeing some softening over the morning so far as risk appetite has waned a little into the end of the week. The RBA meeting next week is not expected to see the RBA cut rates though traders will be keen to hear the bank’s latest assessment in light of recent comments regarding QE by Governor Lowe.