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Forex Today: US Dollar frenzy continues ahead of PPI data and Powell

FXStreetNov 14, 2024 6:50 AM

Here is what you need to know on Thursday, November 14:

Following a subdued performance on Wall Street on Wednesday, Asian markets turned south amid persistent worries over China’s economy, despite the recent stimulus measures rolled out to spur growth.

Markets also remained unnerved amid sticky US inflation figures, which raised concerns over the prospects of future interest rate cuts by the US Federal Reserve (Fed). US CPI rose 2.6% annually in October, coming in higher than the 2.4% growth in September while meeting the forecast. The annual core CPI inflation steadied at 3.3% in the same period vs. 3.3% expected. Monthly figures also aligned with the estimates.

Additionally, waning Trump trades optimism adds to the dour market mood as we head into the European session. However, the US Dollar continues to extend the rally following Donald Trump’s election victory. The Greenback received a fresh boost alongside the US Treasury bond yields after the Associated Press (AP) called the House race with Republicans winning the majority.

US President-elect Trump’s policies on trade and taxes are seen as inflationary and supportive of the USD, Treasury bond yields, etc. The Greenback stands tall near yearly highs against its major rivals even after the inflation data ramped up bets on a December rate cut. The market’s pricing for such a move next month now stands at about 83%, the CME Group’s FedWatch Tool shows, compared with around 63% seen before the data release.

The attention now turns toward the US Producer Price Index (PPI) and Jobless Claims data while speeches from several Fed policymakers, including Chairman Jerome Powell, will hog the limelight as investors look out for more cues on the Fed’s easing trajectory.

Across the FX board, the Japanese Yen emerged as the main laggard in Asia as USD/JPY refreshed four-month highs above 156.00. The uncertainty over the Bank of Japan (BoJ) rate hikes and the unabated USD demand.

AUD/USD remains at the losing end, trading at its weakest in three months near 0.6460. The Australian labor data showed some cooldown in the job market. Ahead of the Aussie jobs data release, Reserve Bank of Australia (RBA) Governor Michele Bullock said that monetary policy was sufficiently restrictive and would remain at current levels until the bank was confident inflation was easing.

NZD/USD tracks the downside in all commodity currencies, with USD/CAD back on the 1.4000 level for the first time since May 2020. WTI Oil extends its losing streak amid risk aversion and demand concerns from China. The US oil is challenging the $68 threshold, as of writing.

EUR/USD stays vulnerable, sitting at yearly troughs near 1.0550. Traders await ECB-speak and a bunch of Eurozone economic data releases for fresh trading impetus ahead of the US events.

GBP/USD struggles at around 1.2700 as investors continue to prefer the US currency. All eyes remain on BoE policymaker Catherine Mann’s and Governor Andrew Bailey’s appearances due later in the day.

Gold keeps its downside momentum intact, flirting with two-month lows below $2,560. Buyers must defend the critical support near $2,545, the confluence of the 100-day Simple Moving Average (SMA) and the September 18 low.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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