Article Highlights

  • U.S. Oct import prices down by 0.5% vs. projected 0.1% decline
  • U.S. Sept import prices downgraded to show 0.6% drop vs. initial 0.1% dip
  • U.S. wholesale inventories up by 0.5% instead of staying flat
  • RBNZ Financial Stability Report: Banking system is stable despite risks
  • RBNZ Gov Wheeler refrains from jawboning the Kiwi
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Weaker-than-expected medium-tier data from the U.S. economy forced the Greenback to either consolidate or return some of its recent forex gains while the Kiwi got a bit of support from the RBNZ Financial Stability Report.

Major Events:

U.S. import prices and inventories data – All red! Import prices for October slid by 0.5% instead of posting a small 0.1% decline while the previous month’s reading was downgraded to show a sharper fall of 0.6% from the initially reported 0.1% dip. Wholesale inventories were up 0.5%, the largest gain in three months, which suggests that stockpiles are building up due to weak demand. Uh oh.

RBNZ Financial Stability Report and Wheeler’s speech – According to the New Zealand central bank, the country’s financial system remains sound even though there are some risks stemming from the slowing dairy industry and the booming housing market. RBNZ officials assured that banks will be able to withstand further increases in dairy debt while acting to curb housing demand.

RBNZ Governor Wheeler acknowledged that the dairy sector is still facing more downside pressures but that banks are already working with farmers to address any difficulties. Forex junkies noted that Wheeler refrained from blaming the Kiwi’s strength for these troubles, citing that the risks were stemming from the slowdown in global growth instead.

Major Currency Movers:

USD – The U.S. dollar coughed up some of its recent wins to the euro and the Swiss franc, as traders probably booked their profits off their short positions. Bleak data from the U.S. economy did very little to keep the dollar afloat, although it was able to hold steady against the yen and the pound.

EUR/USD edged up from a low of 1.0673 to 1.0723, USD/CHF retreated from a high of 1.0085 to 1.0060, USD/JPY is stuck around 123.20, and GBP/USD is flat at 1.5119.

NZD – The release of the RBNZ Financial Stability Report led to a few sudden spikes here and there, as forex market watchers seemed surprised to hear that the central bank isn’t too pessimistic.

NZD/USD dipped briefly to the .6500 handle before zooming back up to .6547, NZD/JPY spiked to a low of 80.13 then made a quick turnaround to a high of 80.68, and EUR/NZD popped up to a high of 1.6462 before sliding back down to a low of 1.6356.

Watch Out For:

  • Australia’s Westpac consumer sentiment index at 12:30 am GMT (4.2% previous)
  • Chinese Oct industrial production at 6:30 am GMT (5.8% expected, 5.7% previous)
  • Chinese Oct fixed asset investment at 6:30 am GMT (10.2% expected, 10.3% previous)
  • Chinese Oct retail sales at 6:30 am GMT (10.9% expected and previous)
  • Japanese preliminary machine tool orders data at 7:00 am GMT (-19.1% previous)

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