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Thursday, November 17th
As US presidential elections are over next and the most commonly discussed question remains - will the Fed increase its interest rate in December under D.Trump’s presidency. For now, market’s participants are almost sure that the Fed will perform its hawkish move by the end of the year as economic forecast after the elections has not changed. However, talks regarding further stimulation of the fiscal policy remain divided as it is hard to say what impact will provide D.Trump’s administration on the US monetary policy. Moreover, it is expected that after next FOMC meeting minutes the Fed will stay in wait-and-see mode to rearrange its economic forecast what is quite logical. Today J.Yellen will state her testimony in NA session which will be closely watched for any hints of what to expect next.
The Aussie dips to its two month lows as Australian jobs appeared short of expectations. The AUD/USD pair fell to its overnight lows as Australian Employment Change came disappointingly low. Labor market remains one of the most sensitive subjects for Australian economy. Moreover, weaker commodities such as copper and oil and higher US dollar on expectations of the Fed rate-hike are also dragging the Aussie lower this morning. Nothing much is left in Australian economic calendar for this week while US economy has prepared full basket of economic events for this Thursday.
Seems that the EUR/USD pair is consolidating its yearly lows on the back of US dollar’s strengthened positions. Yesterday once again the pair slipped under the level of 1.0700 refreshing its yearly lows on 1.0666 spot. Moreover, seems that the major will continue to trade under bearish pressure in mid-term perspective as traders are more and more pricing in further Fed’s rate-hike, that is expected to happen by the end of this year. However, today the pair won’t feel a lack of fundamentals as flurry of macroeconomic reports is scheduled in this day data calendar with J.Yellen’s testimony in the main role.
The yen is following global markets trend today and also is showing significant drop vs. its American counterpart. The dollar/yen pair is wobbling near 109.00 level over the past few days with it tops marked at 109.75 that is the highest levels since June 2016. Today beside broadly based dollar’s strength the market will keep digesting the latest BOJ headlines that the CB is ready to apply further monetary policy easing stimulus as a regulation tool of the new monetary policy strategy that will provide bearish pressure on the yen. Today lack of fundamentals from Japanese side will be fully compensated by numerous reports from US docket.
The main events of the day:
EU CPI – 12.00 (GMT +2)
US Building Permits – 15.30 (GMT +2)
Core US CPI – 15.30 (GMT +2)
Philadelphia Fed Manufacturing Index– 15.30 (GMT +2)
Fed Chair J.Yellen Testifies – 17.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0612 R. 1.0798
USDJPY S. 108.24 R. 110.16
GBPUSD S. 1.2358 R. 1.2544
USDCHF S. 0.9946 R. 1.0094
AUDUSD S. 0.7394 R. 0.7614
NZDUSD S. 0.6995 R. 0.7151
USDCAD S. 1.3351 R. 1.3553
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