Filed Under:
Forex pairs in this Article » EUR/USD, GBP/USD, USD, USD/JPY
Talking Points:

  • Yen Falls as Soft US Data Dents QE Taper Bets, Durable Goods Ahead
  • Euro Pops Higher as Germany’s CDU and SPD Reach Coalition Deal
  • Pound Unlikely to Find Strength in Confirmation of Strong 3Q UK GDP
Get Real-Time Feedback on Your Trades with DailyFX on Demand!

The Japanese Yen underperformed as Nikkei 225 futures advanced in overnight trade, sapping haven demand for the safety-linked currency. The move may have reflected a pickup in risk appetite on the back of ebbing concern about a near-term “tapering” of the Federal Reserve QE3 stimulus program after a disappointing set of US economic data. November’s Consumer Confidence reading fell short of economists’ forecasts (as we expected), dropping to the weakest level in seven months.

The Euro edged higher – touching a monthly high – as German Chancellor Angela Merkel and her CDU party reached a coalition agreement with rival SPD. This introduced a sense of political stability in the Eurozone’s largest economy. Key Eurozone initiatives delayed by the absence of an administration in Berlin – notably, a banking union that includes region-wide supervision and a uniform resolution mechanism for troubled lenders – may now continue to progress.

A revised set of third-quarter UK GDP figures headlines the economic calendar in European hours. Expectations call for confirmation of initial estimates that showed the economy added 0.8 percent in the three months through September, marking the strongest performance since mid-2010. The outcome may not offer much of a lift to the British Pound.

Indeed, firm economic data means relatively little for Sterling if it doesn’t translate into policy tightening expectations. This was precisely the message delivered to Parliament’s Treasury Committee by BOE Governor Mark Carney yesterday.The central bank chief stressed that the objective of the Bank’s forward-guidance regime – a scheme whereby it has pledged not to consider rate hikes at least until unemployment falls to 7 percent – was to disconnect improving economic data from rate rise speculation.

Later in the day, the spotlight turns to the US data docket anew, where October’s Durable Goods Orders report is on tap. Expectations point to a 2 percent decline from the prior month, marking the first drawdown in three months. That may further scatter near-term Fed QE reduction bets and compound downward pressure on the US Dollar after the benchmark currency pulled back having set a monthly high, as expected.

New to FX? START HERE!

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

21:45

NZD

Trade Balance (NZ$) (OCT)

-168M

-350M

-216M

21:45

NZD

Trade Balance YTD (NZ$) (OCT)

-1005M

-1120M

-1550M

21:45

NZD

Exports (NZ$) (OCT)

4.25B

4.00B

3.82B

21:45

NZD

Imports (NZ$) (OCT)

4.42B

4.32B

4.04B

0:00

AUD

CBAHIA House Affordability (3Q)

75.1

-

72.8

0:30

AUD

Construction Work Done (3Q)

2.7%

0.5%

0.1%

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

7:00

CHF

UBS Consumption Indicator (OCT)

1.28 (A)

1.56

Medium

9:00

EUR

German GfK Consumer Confidence (DEC)

7.1

7.0

Medium

9:30

GBP

Gross Domestic Product (Q/Q) (3Q P)

0.8%

0.8%

High

9:30

GBP

Gross Domestic Product (Y/Y) (3Q P)

1.5%

1.5%

High

9:30

GBP

Private Consumption (Q/Q) (3Q P)

0.6%

0.3%

Low

9:30

GBP

Government Spending (Q/Q) (3Q P)

0.5%

0.5%

Low

9:30

GBP

Gross Fixed Capital Formation (Q/Q) (3Q P)

1.3%

0.8%

Low

9:30

GBP

Exports (Q/Q) (3Q P)

-1.0%

3.0%

Low

9:30

GBP

Imports (Q/Q) (3Q P)

1.3%

2.9%

Low

9:30

GBP

Total Business Investment (Q/Q) (3Q P)

2.0%

-2.7%

Low

9:30

GBP

Total Business Investment (Y/Y) (3Q P)

-

-8.5%

Low

9:30

GBP

Index of Services (M/M) (SEP)

0.4%

0.4%

Low

9:30

GBP

Index of Services (3M/3M) (SEP)

0.7%

0.6%

Low

11:00

GBP

CBI Reported Sales (NOV)

10

2

Low

Critical Levels:

CCY

SUPP 3

SUPP 2

SUPP 1

Pivot Point

RES 1

RES 2

RES 3

EURUSD

1.3436

1.3495

1.3534

1.3554

1.3593

1.3613

1.3672

GBPUSD

1.6031

1.6111

1.6164

1.6191

1.6244

1.6271

1.6351



comments powered by Disqus
Trading Center