By Jay and Julie Hawk of www.TheFXperts.com
The DXY index is currently trading up +0.11 on the day at 96.90 and has support in the 96.66-96.70 region, with initial resistance showing on the chart at 97.00. If the 97.00 level is taken out, a rally to the 97.25-97.35 area could be forthcoming.
The U.S. Dollar Index (DXY) gained ground against most foreign currencies after the release of the ADP Non-Farm Employment number this morning, which showed an increase of +227K jobs in October compared to an expectation of +188K. Nevertheless, the previous number was revised down somewhat from +230K to +218K. Also supporting the Greenback was yesterday’s release of U.S. CB Consumer Confidence, which printed at 137.9 versus an expectation of 136.3, and was the highest number seen for the survey since 2000.
Elsewhere today, Canadian GDP showed a +0.1% increase, versus an expected reading of 0.0%. Also, the New Zealand ANZ Business Confidence survey printed at -37.1 versus a previous reading of -38.3, while Australian CPI and Trimmed Mean CPI both printed at +0.4%, in line with expectations. In addition, the BOJ left their benchmark Policy Rate at a negative -0.10, as was widely anticipated.
The Euro weakened in part due to Angela Merkel’s announcement that she would not be seeking another term as head of the Christian Democratic Union Party (CDU). Sterling was the strongest currency against the Greenback, and remained firm after a better than expected UK Net Lending to Individuals number on Monday, which showed an increase of +4.7B m/m versus an expectation of +4.1B. The Pound found support despite Brexit talks with the EU stalling, thereby causing the EU to press ahead with their plans for a no-deal Brexit without any indication of when talks will resume. Time is quickly running out for a deal, with only 149 days left until Brexit day.
Looking ahead, tomorrow is Super Thursday for the UK, with the release of UK Manufacturing PMI, the BOE Inflation Report, the Official Bank Rate, the Monetary Policy Summary, a speech by BOE Governor Mark Carney, and the MPC voting results. Also out on Thursday will be U.S. ISM Manufacturing PMI and the Australian Trade Balance.
On Friday, highlighted releases include U.S. Non-Farm Payrolls, Average Hourly Earnings and the U.S. Unemployment Rate. Also due out on Friday are Australian Retail Sales, UK Construction PMI, Canadian Employment Change and the Canadian Unemployment Rate and Trade Balance.
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