Americas roundup: Dollar index hurt by tax plan skepticism, Gold rises, U.S. treasury yields slip as risk appetites fade, Wall street slips, Oil rises over 2 pct, still set for first weekly fall in 6-november 18th 2017
Source: FxWire Pro - Media Round Ups / 19 Nov 2017 07:58:38 Eastern Standard Time
• U.S. Oct Housing starts, 1.290 mln, 1.185 mln forecast, 1.127 mln previous 1.135 mln revised.
• U.S. Oct Building permits, 1.297 mln, 1.247 mln forecast, 1.225 mln previous.
• Canada Oct CPI Inflation m/m, 0.1%, 0.1% forecast, 0.2% previous.
• Canada Oct CPI Inflation y/y, 1.4%, 1.4% forecast, 1.6% previous.
• Canada Oct CPI BoC Core y/y, 0.9%, 0.8% previous.
• Canada Oct CPI BoC Core m/m, 0.3%, 0.3% forecast, 0.2% previous.
• Canada Oct CPI m/m SA, 0.2%, 0.2% previous.
• Canada Oct Core CPI m/m SA, 0.2%, 0.1% previous.
• Two weeks to unlock Brexit, EU tells Britain's May.
• Cheap ECB cash still key for eurozone economy: Draghi.
• German economy to grow much stronger than expected in 2017 –Ifo.
• German parties head into long weekend of coalition talks.
• China central bank says to continue prudent, neutral monetary policy.
• North Korea rules out negotiations on nuclear weapons.
Looking Ahead - Economic Data (GMT)
• 01:30 China Oct House prices y/y, 6.3% previous (Nov 18)
• 21:45 New Zealand Oct Food price index, -0.2% previous (Nov 19)
• 23:50 Japan Oct Exports y/y, 15.8% forecast, 14.1% previous (Nov 20)
• 23:50 Japan Oct Imports y/y, 20.2% forecast, 12.0% previous (Nov 20)
• 23:50 Japan Oct Trade balance total (yen), 330.0 bln forecast, 670.2 bln previous (Nov 20)
Looking Ahead - Events, Other Releases (GMT)
• 21:00 San Francisco Fed President John Williams speaks in California (Nov 18)
• 01:45 Brazil's central bank Gov Ilan Goldfajn speaks in California (Nov 19)
• 12:15 ECB's executive board member Sabine Lautenschlager speaks in Frankfurt (Nov 20)
• 14:00 ECB's President Mario Draghi speaks in Brussels (Nov 20)
EUR/USD is likely to find support at 1.1738 levels and currently trading at 1.1798 levels. The pair has made session high at 1.1804 and hit lows at 1.1772 levels. Euro inched higher against dollar on Friday as the dollar eased as investors remained skeptical of U.S. Republicans' efforts to pass tax cuts after a barren first year for the Trump administration in Congress. Congressional Republicans took important steps on Thursday toward the biggest U.S. tax code overhaul since the 1980s, with the House of Representatives approving a broad package of tax cuts and a Senate panel advancing its own version of the legislation sought by senior lawmakers and President Donald Trump. The House vote shifted the tax debate to the Senate, where a tax-writing panel finished debating and approved a bill late on Thursday. That measure has already encountered resistance from some within the Republicans ranks. Full Senate action is expected after next week's Thanksgiving holiday. The dollar index, which measures the greenback against six rival currencies, was down 0.14 percent to 93.805. For the week, the index was down 0.6 percent. The dollar was also pressured by a report on Thursday that Special Counsel Robert Mueller's investigators probing possible Russian interference in the 2016 U.S. election had subpoenaed Trump's election campaign for documents.
GBP/USD is supported in the range of 1.3130 levels and currently trading at 1.3211 levels. It reached session high at 1.3256 and dropped to session low at 1.3166 levels. Sterling initially rose against the dollar on Friday but trimmed some of the early gains as investors took profits after the European Union repeated an early December deadline for Prime Minister Theresa May to move on Britain's Brexit divorce bill. European Council President Donald Tusk increased the pressure on May to make progress in time for the EU to respond at a summit on Dec. 14-15, or risk losing a chance to push the talks to a discussion of future trade ties something London desperately wants so it can offer some certainty to nervy businesses. Sterling rose half a percent early on to hit a 2-1/2 week high of $1.3260 amid broad dollar weakness. But the pound gave up most of the gains to stand 0.1 percent higher on the day at $1.3203. Progress between European and British negotiators at the December summit in Brussels is seen as an important milestone in the Brexit talks, as businesses seek clarity on the terms of the divorce by the New Year, when many will make investment decisions. Data this past week offered hardly any support to sterling. UK consumer price inflation was at 3.0 percent in October, lagging expectations, while the number of people in work in Britain fell by the most in more than two years in the three months to September. Both indicators would support the view that further interest rate rises by the Bank of England would come at a slow pace.
USD/CAD is supported at 1.2726 and is trading at 1.2767 levels. It has made session high at 1.2882 and lows at 1.2736 levels. The Canadian dollar weakened against its U.S. counterpart on Friday after data showed subdued domestic inflation reduced expectations for further interest rate hikes by the Bank of Canada through the first quarter of next year. Canada’s annual inflation rate decreased to 1.4 percent last month from 1.6 percent in September, in line with economists' forecasts, while a recent uptrend in the Bank of Canada's measures of core inflation stalled. The loonie lost ground despite an increase in the price of oil, one of Canada's major exports. U.S. crude was up 1.34 percent at $55.88 a barrel. Chances of another rate hike by the Bank of Canada by March slipped to about 60 percent from 70 percent before the data, the overnight index swaps market indicated. The central bank raised rates in July and September for the first time in seven years but has not done so since because of worries about a number of uncertainties for the outlook of the economy, including renegotiation of the North American Free Trade Agreement. The fifth round of NAFTA talks begin on Friday in Mexico and continue through Tuesday. Canada is open to a Mexican proposal to review the trade agreement every five years instead of terminating it automatically if it is not renegotiated, as the United States has demanded, two government sources said on Thursday. The Canadian dollar was last down 0.3 percent at C$1.2768 to the greenback. It touched its weakest since Nov. 7 at C$1.2815.
USD/JPY is supported around 111.63 levels and currently trading at 112.15 levels. It peaked to hit session high at 112.47 and made session lows at 111.93 levels. The U.S. dollar weakened against the yen on Friday as the dollar came under selling pressure as investors were skeptical that President Donald Trump's Republican party would succeed in its efforts at U.S. tax reform. Congressional Republicans took important steps on Thursday toward the biggest U.S. tax-code overhaul since the 1980s, with the House of Representatives approving a broad package of tax cuts, and a Senate panel advancing its own version of the legislation sought by senior lawmakers and President Donald Trump. The House vote shifted the tax debate to the Senate, where a tax-writing panel finished debating and approved a bill late Thursday evening. That measure has already encountered resistance from some within the Republicans ranks. Full Senate action is expected after next week's Thanksgiving holiday. Trump, who is still seeking his first major legislative win since taking office in January, went to the U.S. Capitol just before the House vote to urge Republicans to pass the tax bill, which Democrats call a giveaway to the wealthy and businesses. The greenback also came under pressure after a report that investigators probing possible Russian interference in the U.S. election had subpoenaed President Donald Trump's election campaign for documents. The greenback was down 0.54 percent against the Japanese yen.
Disappointing earnings updates and a series of broker downgrades weighed on European shares on Friday, with regional indexes posting their second weekly fall in a row.
UK's benchmark FTSE 100 closed down by 0.01 percent, the pan-European FTSEurofirst 300 ended the day down by 0.34 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day down by 0.3 percent.
Wall Street ended the week on a sour note on Friday, with major indexes falling modestly as investors weighed the fate of the Republicans' tax overhaul plan.
Dow Jones closed down by 0.43 percent, S&P 500 ended down 0.27 percent, Nasdaq finished the day down by 0.16 percent.
U.S. Treasury yields edged lower on Friday, in line with weakness on Wall Street and declines in German 10-year bond yields, as the yield curve continued to flatten following strong U.S. housing starts data for October.
In late trading, the 10-year Treasury yield fell to 2.350 percent from 2.361 percent late on Thursday.
The U.S. two-year yield climbed to a new nine-year peak of 1.73 percent. It was last at 1.725 percent, from 1.712 percent on Thursday.
U.S. 30-year bond yields slid to 2.790 percent, down from Thursday's 2.806 percent.
Gold jumped to a one-month high on Friday as the dollar softened on uncertainty about the progress of a proposed overhaul of the U.S. tax code that would be the biggest since the 1980s.
Spot gold was up 1.2 percent at $1,293.53 an ounce by 2:30 p.m. EST (1930 GMT), on track for the biggest one-day jump since Aug. 28. It rose to the highest price since Oct. 16 at $1,297. For the week, it was poised to finish up 1.3 percent, its strongest weekly performance since mid-October.U.S. gold futures for December delivery settled up 1.4 percent at $1,296.50.
Oil rose more than 2 percent on Friday as a major U.S. crude pipeline was shut and traders anticipated an OPEC deal to extend curbs on production, but prices remained on track for a weekly loss after five sessions of declines.
Brent crude oil was up $1.49 at $62.85 a barrel by 1:48 p.m. EST (1848 GMT) while U.S. West Texas Intermediate crude (WTI) rose $1.37 to $56.51 a barrel.© FxWire Pro 2017. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.