News

China’s exports contracted for the first time since February and imports slowed more than expected in October.

The US Dollar trims losses on Friday with investors wary of risk following another sell-off on Wall Street, as concerns of an AI bubble remain alive.

Fundamental
Overview

The USD has been stronger
across the board since the hawkish turn from Fed Chair Powell at the last FOMC
press conference. The repricing in interest rate expectations acted as a
tailwind for the greenback as Treasury yields continued to push higher.

On Wednesday, we got a
couple of strong US data. The US ADP beat forecasts (although that was expected)
and the ISM Services PMI came in much better than expected
with the price index pushing into a new cycle high.

Despite the strong data,
the greenback failed to extend the rally. This is generally a signal of a
short-term top with the market needing more to keep the trend going. In fact,
the market pricing is now showing a 65% probability of a December cut, which is
about right. The data in December will probably have the final say and
hopefully we will get an NFP and CPI report before the next FOMC decision.

On the CAD side, the BoC
cut interest rates by 25 bps last week as expected bringing the policy rate to
the lower bound of their neutral rate estimate of 2.25%-3.25%. The central bank
has also signalled that they reached the end of their cutting cycle, although
they kept the door open for another cut if needed.

In fact, the statement
said: “if inflation and economic activity evolve broadly in line with the
October projection, Governing Council sees the current policy rate at about the
right level to keep inflation close to 2% while helping the economy through
this period of structural adjustment. If the outlook changes, we are prepared
to respond. Governing Council will be assessing incoming data carefully
relative to the Bank’s forecast.”

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD is consolidating above the recent high around the 1.4080 level.
The buyers will likely continue to pile in around these levels with a defined
risk below the 1.4080 level to keep targeting the 1.4295 level next. The sellers,
on the other hand, will want to see the price falling below the 1.4080 level to
position for a pullback into the trendline around the 1.3950 level.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the consolidation above the 1.4080 level. There’s not much we
can add here as the buyers will likely step in around the 1.4080 level with a
defined risk below it to keep pushing into new highs, while the sellers will
look for a break lower to position for a correction into the major trendline.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the high at 1.4140 is acting as a new resistance. If we push into it
again, the sellers will likely step in there with a defined risk above it to
position for the pullback into the major trendline. The buyers, on the other hand,
will look for a break higher to increase the bullish bets into new highs. The
red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the Canadian employment report and the US
University of Michigan Consumer Sentiment report.

This article was written by Giuseppe Dellamotta at investinglive.com.

After the risk selloff yesterday, we are seeing a calmer mood play out in European morning trade today. And that’s keeping the market moves this week in check amid some pushing and pulling in general. 10-year Treasury yields moved up to a one-month high on Wednesday before falling back yesterday and then are now pushing back up to 4.11%. That is helping to steady the ship with the dollar as well, with the greenback sitting a little higher across the board so far today.

The changes among dollar pairs are relatively light for the most part, though USD/JPY is up 0.3% to near 153.50 and hoping to recover the drop from yesterday. GBP/USD is also back down to 1.3100 following the BOE decision, with price action holding in between key near-term levels at 1.3083 and 1.3144 for the time being.

Besides that, the prevailing sentiment among major currencies continues to be centered around the risk mood for the most part. European currencies have seen little change on the week against the dollar in general. Meanwhile, the bigger moves are mostly surrounding the commodity currencies – which have been offered amid the risk selloff in the past few sessions.

Here’s a snapshot of the weekly change thus far, exemplifying that sentiment.

• EUR/USD: Flat
• USD/JPY: -0.3%
• GBP/USD: -0.3%
• USD/CHF: +0.5%
• USD/CAD: +0.8%
• AUD/USD: -0.9%
• NZD/USD: -1.8%

This article was written by Justin Low at investinglive.com.

Singapore Foreign Reserves (MoM): 392.2B (October) vs previous 393.1B

The specially configured aircraft was depicted on an assembly line in France, with its fuselage sections, wings and landing gear now all attached.

The Pound Sterling (GBP) trades lower against its major currency peers on Friday, except second-level safe-haven currencies. The British currency has come under pressure after the Bank of England (BoE) decided to hold interest rates steady at 4%, with a narrow majority vote of 5-4.

The Pound is gaining momentum on Friday, benefiting from Yen weakness following soft Japanese household spending data. The pair bounced from lows around 200.70 earlier in the day, but is struggling to break above the previous two days’ highs, in the area of 201.40.

The Indian Rupee (INR) trades cautiously against the US Dollar (USD) on Friday. The USD/INR pair ticks up to near 88.75 despite hints from United States (US) President Donald Trump that his relations with Indian Prime Minister (PM) Narendra Modi are stable.