XE: Aside from a brief dip in the aftermath of the weaker retail sales and negative PPI data, the dollar rallied broadly in N.Y. on Friday. The unit moved to session highs following the better Michigan sentiment data, though gains were likely limited by another red day on Wall Street, where earning and global growth concerns weighed heavily on stocks this week. After peaking at 1.0795 after the early data, EUR-USD fell to session lows of 1.0718 before steadying near 1.0730. USD-JPY made 122.44 lows, before managing to rally back to 122.98. Cable spiked to 1.5266 highs, later giving back the 1.52 handle, and settling in just over the figure.
EUR-USD rallied to 1.0795 from under 1.0755 after the soft retail sales and cold PPI data, though gains were brief. The pairing turned lower quickly, later bottoming at 1.0718 after the better sentiment data. The greenback remained firmer overall, though talk of euro bids ahead of 1.0700 kept further EUR downside in check into the London close.
USD-JPY picked up from a one-week low of 122.49, though got no further than 122.79 ahead of the N.Y. open. Weak U.S. data saw the pairing take out the overnight base, as it made a 122.44 base. The dollar recovered quickly however, and despite another down day on Wall Street, and softer Treasury yields, USD-JPY posted highs of 122.98 after the London close.
Cable has recouped back above 1.5200 with the dollar losing some of its recent upside momentum. We expect the pound to hold its own against the greenback, or at least outperform the euro in the scenario of further broad dollar gains into next month’s FOMC. The UK’s Oct-Sept labour market report this week showed unemployment unexpectedly falling to a to a cycle low of 5.3%, and the employment rate rising to a record.
EUR-CHF has lifted above 1.08 in the latest oscillation. A firmer EUR-USD has helped, with the euro failing to make much downside progress despite weaker-than-forecast Eurozone GDP data. Despite the recent bouts of euro selling, the cross remained comfortably above the sub-1.05 levels that were seen earlier in the year, before the SNB cut the deposit rate to -0.75%.
USD-CAD losses were short-lived, with the pairing ramping up to intra day highs of 1.3327 after touching 1.3273 lows in the aftermath of the soft U.S. data. The greenback overall reclaimed its post-data losses, and then some. WTI crude oil added to early losses, supporting USD-CAD, later trading to new 10-week lows of $40.23. Thursday’s one-month USD-CAD high of 1.3341 was the first resistance level, which was breached, as USD-CAD posted new one-month highs of 1.3349.
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