Will US data get the dollar back on track before the holiday?
City Index November 26, 2014 2:08 PM
<p>The inflation report hearing yesterday didn’t leave us with much more to go on; more of the same remarks from Carney mainly that the rate […]</p>
The inflation report hearing yesterday didn’t leave us with much more to go on; more of the same remarks from Carney mainly that the rate rises will be gradual, but look set to happen as expected in mid-2015. One point was that in the near term it looks like the inflation data will drop below 1 %, which will keep pressure on the pound. GBP/USD is currently trading just above the 1.5700 level, pushed higher by a weaker US consumer confidence yesterday. Today’s data out of the UK is the second GDP estimate for the quarter, with an expected no change at 0.7%.
The US data yesterday was key to all the moves in the majors. GDP came in higher at 3.9%, a good bit of growth for the US economy, which got the USD moving higher. All seemed to be back in its normal trend of late, but then came the consumer confidence which was expected to be higher than the previous at 95.9 but ended coming in at its lowest since June at 88.7, showing an increasing lack of confidence in the US. The USD dropped it gains and with a holiday coming up tomorrow it will look today to get back on track.
Today’s US data starts off with core durable goods orders with an expected rise to 0.5% from a previous read of -0.1%., Then comes the unemployment claims with a an expected drop to 287k from 291k, and finally the new home sales expected to rise to 471k from 467k. So if all expected data comes in we could be seeing the USD back in its upward trend putting pressure on the other pairs.
The euro area has no data today so is very much in the hands of the GBP and USD reactions to data, like yesterday catching a ride higher after weaker US data. Currently trading below 1.2500 level.
The Aussie has the Capex due out overnight so one to be careful of; the expected data is a fall to -1.7% from 1.1%. The Kiwi has its trade balance data to look out for also expected at -645m from previous -1350m.
Supports 1.2425 1.2370 1.2340 | Resistance 1.2510 1.2540 1.2595
Supports 117.50 117.20 116.70 | Resistance 118.30 118.75 119.05
Supports 1.5670 1.5615 1.5580 | Resistance 1.5755 1.5790 1.5840
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.