Here's what you need to know on Wednesday, November 13th.
Broad market gains inspired by President Trump's trade came early Wednesday morning as focus shifted back to economic data ahead of the all-important U.S. Consumer Price Index (CPI) report due to be released in U.S. trading. I took a breather.
The U.S. dollar (USD), along with U.S. Treasury yields, has paused its continued rise as traders take profits from long greenback positions as the U.S. battles inflation. This data is crucial in gauging the Federal Reserve's easing trajectory.
According to CME Group's FedWatch tool, the market is pricing in about a 62% chance of another 25 basis point (bp) rate cut in December, up from about 83% a month earlier.
President-elect Donald Trump's hard-line policies on trade and tax cuts are expected to lead to inflation, and major rivals across the board are pushing for higher interest rates while backing greenbacks.
Additionally, lingering concerns about China's economy and uncertainty ahead of the US Consumer Price Index (CPI) have kept traders on edge, with major currencies moving within a narrow range.
USD/JPY is the highest since July 30th, hovering around 155.00. The lack of verbal intervention from Japan and uncertainty surrounding the Bank of Japan's interest rate hike amid Japan's weak minority government continue to weigh on the domestic currency.
Australian dollar/US dollar has entered a consolidation phase below 0.6550, and risk-off flows are checking its recovery. New Zealand dollar/US dollar It struggles above 0.5900 as investors move away from risky assets. US dollar/Canadian dollar Amid the slump in WTI crude oil prices, it regained 1.3950.
euro/usd After hitting a year-to-date low of 1.0594 on Tuesday, it has fallen back and is now testing support at 1.0600. Political uncertainty in Germany and policy differences between the Fed and the European Central Bank (ECB) are weakening the pair.
GBP/USD It fell after mixed UK labor data and remains vulnerable at around 1.2740. The next topic to attract attention was a speech by Catherine Mann, a member of the Bank of England's policy committee.
gold It maintains a lukewarm rebound just above $2,600 and is within reach of a two-month low. US CPI data and many Fed speakers are eagerly awaiting the next big move in bright metals.
