- 25.10.2021 02:00 pm
- 22.10.2021 12:45 pm
- 22.10.2021 12:45 pm
- 21.10.2021 03:15 pm
- 21.10.2021 03:15 pm
: New Zealand’s Kiwi Dollar trimmed losses after tumbling to a weekly low at 0.6876 from its 0.6960 opening yesterday. The move came after the RBNZ’s decision to hike its Official Cash Rate by 25 basis points to 0.5%. It was the 1st rate hike by the New Zealand Central Bank in 7 years. The NZD/USD pair soared to a high at 0.6979 immediately after the news before tumbling lower. After the dust settled, the NZD/USD pair finished at 0.6917 in New York. Elsewhere, dismal European economic data saw the EUR/USD pair slide to close near late July lows at 1.1595 (1.1622). The Dollar Index (USD/DXY), which measures the value of the Greenback against a basket of 6 major currencies, extended its gains to 94.22 (94.00), up 0.26%. The Australian Dollar dipped 0.18% to 0.7275 from 0.7288 yesterday. Sterling slipped 0.27% to 1.3588 (1.3622). The Dollar finished modestly lower against the Japanese Yen to 111.38 from 111.50 yesterday. USD/CHF dipped to 0.9272 (0.9283). Against the Asian and Emerging Market currencies, the US Dollar was mostly higher. The USD/SGD pair climbed to 1.3588 (1.3573) while the USD/THB (US Dollar vs Thai Baht) was last at 33.80, little changed from 33.84 yesterday. The USD/CNH pair (Dollar-Offshore Chinese Yuan) settled at 6.4545 (6.4490 yesterday).
Risk appetite improved after US lawmakers looked likely to extend its massive debt limit to December. Equity markets edged higher. The DOW was last at 34,435 (34,350) while the S&P 500 finished at 4,365 (4,345 yesterday). Global bond yields were mixed with the benchmark US 10-year Treasury bond rate at 4.525 (1.53%). Germany’s Ten-Year Bund yield closed at -0.18% (-0.19%). The Japanese 10-year JGB yield was last at 0.08% from 0.05% yesterday.
Data released yesterday saw Germany’s August Factory Orders slump to -7.7% from -3.4% in July and worse than median estimates at -2.1%. That’s huge! The Eurozone’s August Retail Sales missed median expectations of 0.8%, slipping to 0.3%. Eurozone Annual Sales in August slumped to 0% against forecasts at 0.7%. UK September Construction Output eased to 52.6 from 55.2, missing estimates at 54.0. US September ADP Non-Farm Employment climbed to 568,000 from a downward revised gain of 340,000 in August, beating forecasts at 425,000.
On the Lookout: Today’s economic calendar is light ahead of tomorrow’s US Payrolls report which is the highlight of the week. Australia’s AIG September Services Index was little changed at 45.7 from a previous 45.6. Japan is next with its Preliminary August Leading Economic Indicator (f/c range from 102.0-104.3 from July’s 104.1). Switzerland kicks off European reports with its September Unemployment Rate (f/c 2.8% from 2.9%). Germany follows with its August German Industrial Production data (m/m f/c -0.4% from previous 1.0% - ACY Finlogix). France reports its August Trade Balance which is a Deficit (f/c -EUR 6.8 billion from -EUR 6.96 billion). Italy follows with August Retail Sales (m/m f/c 0.2% from July’s -0.4%). The ECB releases its Monetary Policy Meeting Accounts next. US releases its September Challenger Job Cuts (no f/c given, previous was 15,723 – ACY Finlogix). US Initial Jobless Claims follow (f/c 348,000 to 350,000 from previous 362,000). US August Consumer Credit Change is next (f/c USD 17.5 billion from previous USD 17 billion). Canada releases its September IVEY PMI report (f/c 60.3-60.7 from August’s 66.0). Chinese markets are still out today with their one week National/Golden Week break.
Trading Perspective: The Dollar should maintain its overall bid as FX markets consolidate gains ahead of tomorrow’s US Payrolls report. Stronger than expected US Private Payrolls (ADP) amidst subsiding Covid-19 infections lifted sentiment. An agreement of opposition US Republican lawmakers to extend the US debt ceiling into December also eased market worries. The debt ceiling is a drama that we have seen come and go in the past few years. It is nothing new.
The Dollar Index (USD/DXY) settled 0.26% higher to 94.22 overnight. A week ago, USD/DXY was at 94.37. Earlier this week we saw a slide in the Dollar Index to 93.68 (Oct 5). We can expect more profit-taking and position adjustments to prevent any further advances for the Greenback.
Happy trading all, have a top Thursday.
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