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The Greenback gained a couple more pips against its major counterparts thanks to dovish and/or bearish reports from other major economies.

  • New Zealand’s quarterly CPI rose by 0.5% in Q3 vs. 0.4% growth expected, 0.0% previous
  • Australia’s new motor vehicle sales dips by 0.5% vs. 0.1% decline in August
  • RBA: international and domestic conditions “more positive since 2016”
  • RBA: “material further appreciation” of AUD would result in slower growth, inflation

Major Events/Reports:

Extended dollar/ equities party

As mentioned in the U.S. session recap, Stanford University economist John Taylor’s name is now being floated around as a contender for the next Fed Chairman. BFD, since Taylor is seen as a hawkish candidate.

It also helped the dollar bulls’ cause that North Korea’s deputy UN ambassador Kim In Ryong warned that the situation in the Korean Peninsula “has reached the touch-and-go point and a nuclear war may break out any moment.” No pressure.

The possibility of a hawkish Fed Governor sent U.S. Treasury yields higher and took the Asian bourses along with it.

  • Nikkei is up by 0.19% to 21,296.50;
  • Australia’s A SX 200 is up by 0.84% to 5,896.00;
  • Hang Seng is up by 0.10% to 28,720.50, and
  • China’s A50 is up by 0.21% to 12,359.59.

Increased dollar demand also weighed on gold prices but didn’t move Black Crack prices much.

  • Gold is down by 0.58% to $1,295.45;
  • Silver is down by 0.83% to $17.225;
  • Brent crude oil is up by 0.02% to $57.83, and
  • U.S. crude oil prices is down by 0.13% to $51.80.

RBA’s meeting minutes

Earlier today the Reserve Bank of Australia printed its minutes from its October statement.

And as in the initial statement, the central bank maintained its positive growth outlook, saying that the “effect of the decline in mining investment had mostly passed” and that “growth in public demand and non-mining business had picked up.

It also shared that the uptick in consumption and trading activity reflected an “unwinding of temporary factors” from the previous quarter.

The central bank also remained optimistic over employment conditions, as they believe that recent growth is “expected to support income growth, and therefore consumption growth, in the period ahead.

And while “slow growth in real wages and high levels of household debt” will likely constrain household spending, wage growth is also expected to “increase gradually,” which will “contribute to a gradual rise in inflation over time.

Unfortunately, the RBA also didn’t let up from its jawboning. It shared that

“The appreciation of the Australian dollar since mid 2017, partly reflecting a lower US dollar, was expected to contribute to ongoing subdued price pressures.

A material further appreciation of the exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”

Major Market Mover(s):

USD

The prospect of a hawkish Fed Governor and geopolitical concerns kept the dollar supported throughout the session.

EUR/USD is down by 13 pips (-0.11%) to 1.1779;
USD/JPY is back at 112.06 after dipping to 112.03;
USD/CHF is up by 8 pips (+0.08%) to .9766, and
USD/CAD is up by 11 pips (+0.09%) to 1.2532.

AUD

The Aussie dipped as soon as the RBA printed its not-so-hawkish meeting minutes, but soon regained some of its losses by the end of mid-day trading.

AUD/USD hit a low of 87.78 before recovering to 87.95 and AUD/JPY dipped to .7834 before rising back up to .7849.

NZD

The New Zealand dollar popped higher thanks to a stronger-than-expected CPI report, but soon lost ground on a bit of risk aversion and dollar strength.

NZD/USD popped up to .7210 before slipping to .7165 while NZD/JPY rose to 80.78 before settling down to 80.30.

Watch Out For:

  • 6:00 am GMT: Germany’s wholesale price index
  • 8:00 am GMT: Italy’s trade balance (4.23B EUR surplus expected, 6.56B EUR previous)
  • 8:30 am GMT: U.K.’s CPI report. Read Forex Gump’s trading guide if you’re planning on trading the event!
  • 8:30 am GMT: U.K.’s house price index (y/y) (5.4% expected, 5.1% previous)
  • 8:30 am GMT: U.K.’s PPI output (0.2% expected, 0.4% previous)
  • 9:00 am GMT: Germany’s ZEW economic sentiment (20.1 expected, 17.0 previous)
  • 9:00 am GMT: Euro Zone’s ZEW economic sentiment (34.2 expected, 31.7 previous)
  • 9:00 am GMT: Euro Zone’s CPI and core CPI numbers