USD Sinks On Data Weakness
USD Selling Off On Data Dump
The US dollar has been a little lower over the European morning on Thursday. Following some weakness in the monthly CPI reading earlier in the week, yesterday, PPI was also lower than expected last month.
After the NFP miss last week, this latest round of data weakness has seen the dollar index pulling back further from recent highs, trading 96.91 last.
EURUSD has rallied from the European open today, boosted by weakness in USD which has seen the pair trading back up to 1.1156 last, just ahead of the 1.1166 resistance level. Today, traders will get the December ECB minutes.
The market will be paying close attention to the discussions around any further easing, with regard to how much support and division there is within the ECB camp.
GBP Higher Despite Data Weakness
GBPUSD has been a little firmer today also, taking advantage of the weakness in USD. Yesterday, December CPI came in lower than expected at 1.3% YoY vs 1.5%.
On the back of a weak December GDP reading, further weight has been given to Carney’s recent warning that the BOE might be forced to cut rates to help buffer the economy despite a Brexit deal having been reached. GBPUSD trades 1.3059 last.
SPX500 Hits New Highs
Risk assets have been higher today, boosted by the official signing of the phase-one trade deal between the US and China last night. The deal, which has been in the works since October last year, is the first step towards dismantling the trade restrictions which have been in place for two years now.
SPX500 trades 3303.63 last, having broken out to new, record highs overnight.
JPY Down, Gold Up
Safe havens have had a mixed morning so far. JPY has been lower, in light of the rally in equities. Meanwhile, gold has been higher given the weakness in USD. XAUUSD trades 1555.18 last, having rallied off the January lows. USDJPY trades 109.97, making its way back up to recent highs.
Crude Fall Ceases (For Now)
Oil prices have been flat so far today. The bullish update from the EIA yesterday reported a 2.5 million barrel drawdown in US crude stores. This has stemmed the declines in oil for now.
Crude trades 58.23 last. Crude has been under heavy selling pressure recently following the passing of risks around potential US/Iran conflict.
USDCAD has been a little weaker today given the selling in USD and the pause in crude downside. USDCAD has now fallen back below the 1.3037 level following the reversal from above the 1.3068 level earlier in the week
Aussie Trying To Climb
AUDUSD has been firmer today, benefiting from the weakness in USD. The signing of the US/China trade deal last night is a positive omen for the Aussie though, in light of the bushfires there, the market is now expecting the RBA to cut rates in February, which is keeping upside contained here. AUDUSD trades .6914 last, edging back towards .6929 resistance.