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Currency Market Analysis

Dec 19, 2019 | Currency Market Analysis

Global Themes

Global events boosted rival currencies at the U.S. dollar’s expense. America’s dollar pared weekly gains following central bank decisions abroad and surprisingly bullish jobs data Down Under. The euro, yen and sterling rose while Canada’s dollar kept near seven-week peaks. The Swedish and Norwegian currencies strengthened after the former’s central bank ended negative interest rate policy. Sweden’s Riksbank, the world’s oldest central bank, increased lending rates to zero from -0.25%. Australia netted nearly 40,000 jobs in November, a bullish amount the pushed unemployment lower and the Aussie dollar higher. Taken together, today’s events were consistent with receding risks facing the global economy, a narrative that’s checked the greenback’s buoyancy. Sterling wavered after the Bank of England voted 7-2 in favor of keeping interest rates at 0.75%. The day ahead features U.S. data like weekly jobless claims which are forecast to improve from two-year highs, and an expected rate cut from Mexico.

CAD

The loonie tiptoed off seven-week highs after local data disappointed. The 1.1% fall in Canadian wholesale trade in October trade was bigger than expected and continued a trend of mixed data. The loonie shot to late October highs this week after area inflation topped the Bank of Canada’s 2% goal, bolstering the central bank’s neutral stance. Canada issues retail sales Friday, a report that’s forecast to rebound after a contraction the previous month.

EUR

The euro steadied thanks to the U.S. dollar losing buoyancy after flirting with one-week highs. Euro sentiment took a technical turn this week after it crossed below its 200-day moving average. The breach to the downside underscored the bloc’s still-fragile economic health and illustrated how meaningful gains continue to elude the 19-nation currency.

Please Note:

The ‘Daily Market Update' will be on a break from the 23rd of December, 2019 to the 5th of January, 2020. The 'Daily Market Update' will resume from January 6th, 2020.

GBP

Sterling extended a slide that drove it to two-week lows. The pound fell after a divided Bank of England left borrowing rates unchanged at 0.75%, and data on the U.K. consumer surprised to the downside, emphasizing the nation’s weak economy. Two of the BOE’s nine members voted for an economy-jolting rate cut, giving today’s decision a dovish tilt. British retail sales tumbled 0.6% in November, wrong-footing forecasts of an increase. GBP buyers are reaping an early holiday gift thanks to sterling’s nearly 5-cent fall from 1 ½ year peaks. 


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