Forex today was a quiet Asian affair, as markets absorbed the latest trade deal optimism with a pinch of salt. The Asian equities traded firmer following the positive Wall Street lead. However, the US equity futures and Treasury yields traded on the back foot that kept the US dollar weaker against most majors, except for the Aussie dollar.
The AUD/USD pair dropped on dismal Australian Retail Sales and Trade data, having remained below the 0.6850 barrier almost throughout this session. The Kiwi, on the other hand, rallied beyond 0.6550 on the Reserve Bank of New Zealand’s (RBNZ) decision on banks’ capital requirement and Governor Orr’s rates-on hold comment. Although, the spot failed to hold the upside amid a retreat in oil prices. However, the Canadian dollar was stronger despite the minor correction in the black gold, driving USD/CAD back below 1.3200 amid BOC optimism. Both crude benchmarks are treading water ahead of the key 2-day OPEC+ meeting that begins later on Thursday.
Meanwhile, USD/JPY failed to sustain above the 200-DMA barrier and fell back into the red near 108.75 region, as the yen was lifted by the hopes that the Japanese stimulus package will help boost economic growth. Amongst the European currencies, both EUR/USD and GBP/USD consolidated the recent gains amid looming trade deal risks, favorable UK election polls and ahead of the key US NFP data due this Friday.
Main Topics in Asia
Trump administration considers 14,000 more troops for Middle East – WSJ
UK PM Johnson pledges £200 tax cut for millions within weeks of Tory victory – The Telegraph
RBNZ's final decision on banks' capital requirements supports financials & Kiwi
Aussie data dump: Retail Sales, (0% vs 0.3% exp) Trade Balance, (450M vs 6100M exp)
Japan to compile economic stimulus worth $120 billion in fiscal spending - Abe
BOJ’s Harada: Bold monetary easing clearly has helped improve economy
Indian rupee to remain on slippery slope next year – Reuters poll
Chinese Ambassador to US: China, US need to get the basics of their relations right
Indonesian Consumer Confidence improves to 124.2 in Nov, Rupiah hits five-day highs
Key Focus Ahead
When are German Factory Orders and how could they affect EUR/USD?
EUR/USD will likely face selling pressure if the data prints below estimates of 0.3% month-on-month growth. Note that the pair is already looking heavy, having created a candle with a long upper shadow on Wednesday.
GBP/USD confronts 200-week SMA amid upbeat polls, UK political plays
GBP/USD keeps range near seven-month tops of 1.3120 ahead of the London open on Thursday. The pair remains underpinned by the optimism surrounding the United Kingdom’s (UK) political scenario.
OPEC Meeting Preview: Do production cuts mean higher crude prices?
OPEC's current production cuts of 1.2 million barrels a day expire in March 2020. Iraq has proposed an additional 400,000 barrels in reductions. Many US shale drillers have debt pressure from low crude prices.
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