Currency Analyst since 2010

Oct. 18: Asian session

US dollar weakened this week versus its main counterparts as the Fed’s Reserve officials (Chicago Fed President Charles Evans and Minneapolis Fed president Naryana Kocherlakota) signal a delay in stimulus reduction. There will be more Fed speakers today at (16:30-20:30 GMT). Reports due next week that may show US home sales and confidence declined. Demand for higher-yielding assets rose this week as US Congress has reached a deal to extend funding and debt-limit deadlines into next year and the government reopened after a shutdown.

The majors are consolidating after a big more yesterday. EUR/USD edged a bit down from yesterday’s high at $1.3681 to $1.3663. Euro strengthened by 140 pips on Thursday. There’s a risk of verbal interventions from the ECB officials. GBP/USD declined by 30 pips from yesterday’s high around $1.6170. Pound rose by about 155 pips on Thursday. USD/JPY has recovered a little to the 98.00 mark after having plummeted to 97.75 yesterday. The BoJ Governor Kuroda will hold a speech today at 6:30 GMT. USD/CHF corrected a bit up to 0.9030 after it lost more than 100 pips and hit 0.9007 on Thursday.

AUD/USD has lost some ground, slipping from the yesterday’s 4-months peak of $0.9550 to $0.9610. NZD/USD has moved down from the yesterday’s high of $0.9525 to $0.8450. China Q3 GDP came in line with expectations at 7.8% q/y (prior: 7.5%). September industrial production has also grown in line with forecast by 10.2% y/y (prior: 10.4%). USD/CAD returned to 1.0300. Canada will release inflation data at 12:30 GMT.

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