FX Trading Update: US Traders on Thanksgiving Holiday – Nov 27, 2014

FX Trading Update: US Traders on Thanksgiving Holiday - Nov 27, 2014

The US dollar didn’t fare so well in recent FX trading, as data from the economy came in mostly weaker than expected. Headline durable goods orders was the only report that showed strong results, with a 0.4% gain versus the estimated 0.4% decline. Core durable goods orders showed a 0.9% decline instead of the projected 0.5% uptick while initial jobless claims was worse than expected at 313K versus 287K. Personal spending and income both posted 0.2% gains, lower than the projected 0.4% increases. New home sales and pending home sales also missed their respective marks, along with the Chicago PMI and revised consumer sentiment figures. There are no reports due from the US economy today as traders are on Thanksgiving Day holiday.

The euro managed to recover against the dollar, as there were no reports released from the euro zone. For today, German preliminary CPI is due and is expected to show a flat reading after declining 0.3% in the previous month. Spanish flash CPI is also due, along with the German unemployment change report. Hiring is expected to pick up by only 1K in the euro zone’s largest economy and a weaker than expected increase might lead to euro losses.

FX Trading Fundamentals

The pound climbed steadily in recent FX trading, as data from the UK was mixed. There were no revisions to the second GDP estimate at 0.7% as expected while the CBI realized sales also came in close to expectations, marking a drop from 31 to 27. Preliminary business investment fell 0.7% in Q3 instead of showing the estimated 2.3% gain. There are no major reports due from the UK today.

The franc advanced to the dollar in recent FX trading, as there were no major reports from Switzerland while the US saw bleak readings. There are still no reports lined up from Swizterland today, although the franc might take its cue from euro zone data. Weak figures might also drive the Swiss currency lower while strong data could keep it afloat.

The Japanese yen held on to most of its recent FX trading gains since Japan didn’t print any new reports recently. Traders are still waiting for more clues from the economy and the BOJ before pricing in more easing expectations. For now, risk sentiment appears to be driving yen price action and the weak appetite for higher-yielders is benefitting the Japanese currency.

The comdolls managed to recover to the dollar while weakening to the yen recently. Earlier today, Australia reported a stronger than expected 0.2% pickup in quarterly private capital expenditure instead of the estimated 1.7% drop. Only the Canadian current account balance is up for release from the comdoll economies today and this might not have such a huge impact on FX trading price action as most traders are off on a Thanksgiving holiday.

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.