FX Currencies Relatively Steady Ahead of Thanksgiving - 27.11.2013

FX pairs were mostly steady in the recent trading with the Aussie and the Japanese Yen being the weakest currencies. The US dollar against its major peers was under pressure due to US Consumer Confidence for November falling to 70.4, below market participants expectations of 72.2 and down compared to previous month at 72.4.

However, US stocks continued their rally with the Dow Jones rising to new high on Tuesday session, closing higher by 0.26%. Asian shares followed with Hang Seng surging by 0.48% and Shanghai Composite gaining 0.82%, NIKKEI 225 though dropped by 0.42%.

The US dollar index spiked lower to 80.51, down from 80.87 weighed by sluggish confidence data which resulted most likely due to previous month US government 16-day shutdown, despite that earlier on Tuesday US Building approvals for October increased more than estimated, suggesting construction sector is improving. Now due to lower US consumer sentiment, expectations for asset tapering faded, pushing the US dollar index to the lower boundary of 81.45/80.44 range. Amid key support at 80.44 we consider chances favor shifting bias to the upside. In our opinion, we wouldn’t trade today against the US dollar unless the US dollar index breaches below 80.44 and still we would be cautious for a fake break.

US Dollar Index

Elsewhere, the USDJPY previous pull back was limited by 101.14 and prices are now going to retest 6-month peak at 101.90, as the uptrend remains strong. The Euro was one of the strongest major currencies against the US dollar yesterday jumping from 1.3518 to as high as 1.3600, coupled by the British pound rising to 1.6228 versus the greenback, approaching once more its 11-month highs at 1.6255. The AUDUSD on the other hand resumed its downside as RBA deputy Lowe comments did not convince market participants that the central bank would not take further accommodative measures.

On the data front, we are aware of the growth data for UK economy during European session and later on we are alerted for US Jobless Claims released one day earlier due to thanksgiving, also US Durable Goods Orders and Chicago PMI are to be watched.