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Thursday’s market sentiment was negative, providing boosting factor for the US Dollar to recover some of the ground lost earlier during the week. The US dollar maintained mixed performance between ups and downs, but tended to advance.
The gloomy market sentiment was partly a result of concerns related to the Ukraine-Russia war and tensions with Western nations following the latest developments in Poland. Ukraine’s Volodymyr Zelenskyy, said that Ukraine was not to blame for the missile strike that hit a Polish city, killing two people. NATO believes Russia was responsible, despite the missile likely coming from Ukraine’s defence.
Other Developments
In China, the coronavirus outbreak worsens. The country reports increased cases on a daily basis, although at the same time, the government eased some restrictions for close contacts and travelers. Nevertheless, potential supply-chain issues are back on the table, with all that that means for the global economy.
Stocks in Asia and Europe closed in the red, triggering substantial losses on Wall Street. However, US indexes bounced back ahead of the close and finished the day little changed.
Further support for the US dollar came from government bond yields. At the end of the day, the 10-year Treasury note offers 3.76%, while the 2-year one pays 4.46%. The advance is more notorious at the shorter end of the curve, a warning for those betting against the American currency.
US House Speaker Nancy Pelosi announced Thursday she would not seek reelection to her congressional leadership role as the top House Democrat after midterm elections showed Republicans seized control of the House.
EURUSD finished the day in the 1.0360 price zone, recovering again from near the 1.0300 threshold, a sign that bulls are not giving up. EU inflation was downwardly revised from 10.7% to 10.6% in October, still at record highs.
The UK government presented a fiscal plan after the obstreperous failure of former Prime Minister Liz Truss’s mini-budget. Finance Minister Jeremy Hunt outlined spending cuts and tax hikes worth £55 billion. The AUDUSD pair trades around 0.6690, down for the day, while USDCAD hovers around 1.3300. A steep decline in crude oil prices partially weighed on the Canadian dollar, as WTI trades at $82.20 a barrel.
The crypto scandal related to the FTX collapse keeps spreading among exchanges. The market has just seen the tip of the iceberg, although the market remains pretty stable after the initial impact.
Economic Data
Philadelphia Fed Manufacturing Index fell to -19.4 versus -6.2 market forecasts and -8.7 prior.
Housing Starts declined by 4.2% MoM in October following September’s 1.3% contraction whereas Building Permits fell by 2.4%, compared to a 1.4% increase recorded in the previous month.
Jobless Claims eased to 222K for the week ended on November 11 versus 225K expected and upwardly revised 226K prior.
Previously released United States Retail Sales and Producer Price Index (PPI) for October could be linked to the Fed officials’ hawkish comments as both of them offered a positive surprise.
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Pelosi to step down from US House Speaker role
USD/CAD surges on hawkish remarks by Fed speakers
USD/CAD could decline to the 1.25 level towards the end of 2023
