The US dollar, despite yesterday speculation of asset tapering, declined overall against its major peers with the US dollar index falling below support at 80.43 to 80.35 on Thursday morning.
US Dollar Index
Yesterday US ADP employment report rose to 215K in November while economists were expecting 172K, triggering speculation for a partial unwind of Fed monthly asset purchases. At a separate report US Trade deficit narrowed to $40.6B for October down from $43.0B in September and less than projected. Later on Wednesday, ISM Non-Manufacturing PMI disappointed market participants with a lower than forecasted figure but New Home Sales increased more than anticipated for October.
Looking forward, to US NFP report, we would expect an increase on employment compared to October figure of 204K since the ADP presented a 16.8% increase coupled with ISM Employment Index registering an increase of 3.3% from 53.2 in October to 56.5 in November.
Elsewhere, the
USDJPY remains under pressure near support at 101.81 as asset tapering speculation drove
NIKKEI 225 lower by 1.50%. The
EURUSD inched above 1-month peak at 1.3619 ahead of ECB monetary press conference which is likely to maintain a dovish tone.
Canadian has been the only major currency losing against the US dollar in the last week with the
USDCAD surging to a more than 3-year high at 1.0705. The Bank of Canada last night decided to keep interest rates at 1.0%, saying that current monetary policy stimulus is appropriate. Canada’s inflation dropped in October to 0.7% below 1-3% BOC target range allowing for the central bank to get more dovish.
Looking ahead, we are alerted for BOE and ECB rate statements as well as US Jobless Claims and US GDP data for the 3rd quarter.
