Daily FX Trading Update: US and Canadian Banks on Holiday – Nov 11, 2014

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Daily FX Trading Update: US and Canadian Banks on Holiday - Nov 11, 2014

The US dollar had a mixed FX trading performance as it regained ground to the pound, euro, and yen but continued to weaken to the rest of its counterparts. There were no reports released from the US yesterday, leaving risk sentiment as the main driver of price action. For today, there are still no reports due from the US as banks are closed on a holiday. Risk appetite could weaken and favor the US dollar as risks of a recession in Russia and geopolitical tension in eastern Ukraine weigh on higher-yielders.

The euro returned its recent FX trading wins to the dollar as euro zone economic data turned out to be disappointing. Industrial production in Italy fell by 0.9% instead of posting the estimated 0.2% rebound while the euro zone Sentix investor confidence reading marked a weaker than expected improvement. For today, there are no major reports out of the euro zone as most banks are also on holiday.

FX Trading Fundamentals

The pound weakened to most of its counterparts in recent FX trading sessions, despite the lack of data from the UK economy. Traders are probably pricing in expectations for Wednesday’s round of economic events, which include the release of the jobs report and the BOE inflation report. There are still no major events lined up from the UK today.

The franc also gave back its recent wins to the dollar, as the Swiss currency followed in the euro’s footsteps. There were no reports released from Switzerland then and none are due today, leaving market sentiment as the main driver of FX trading price action.

The yen resumed its slide to the dollar, as diverging monetary policy biases between the Fed and the BOJ took control of FX trading direction. There were no reports released from Japan yesterday, only comments from Japanese officials saying that the yen is excessively weak. However, emphasis on the likelihood of another sales tax hike next year was enough to drive the yen lower. For today, medium-tier data such as consumer confidence, preliminary machine tool orders and the Economy Watchers sentiment index are due.

The Australian dollar was dragged lower by downbeat inflation prospects in China, as producer prices in the world’s second largest economy saw a worse than expected 2.2% decline. Home loans in Australia slumped by 0.7% while the NAB business confidence index dipped from 5 to 4. Later on, the RBNZ financial stability report is due and a speech by RBNZ Governor Wheeler, with a downbeat outlook likely to drag the Kiwi down.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.