Forex Today: USD rally extends on hawkish Dots, SNB, BOE - Key
Fresh USD buying was the key theme in Asia today, as the Asian traders reacted positively to the unexpectedly hawkish FOMC statement and dots plan, while a 25bps Fed rate hike was largely priced-in. The Asian stocks declined on concerns over capital outflows and higher borrowing costs in wake of Fed’s stance of acceleration in rate increases next year.
Amongst Asia-pac currencies, the USD/JPY pair broke beyond 117 handle, while the Aussie regained 0.74 barrier on the back of stronger Australian jobs data. EUR/USD slumped to the lowest levels since March 2015 near 1.0470, before recovering some ground to climb back above 1.0500.
Going forward, we have a busy economic calendar today, kicking-off with the SNB quarterly monetary policy assessment and Jordan’s presser, which will be followed by a slew of PMIs from the Euro area economies and UK retail sales data. While the BOE interest rates decision and Carney’s presser is scheduled ahead of US open.
Meanwhile, the US docket also remains data-heavy, with the US CPI figures to be reported ahead of the jobless claims and Philly Fed manufacturing gauge among others.
Main topics in Asia
Australian Nov jobs report better-than-expected: Employment change of 39.1K
Australian Nov employment report came better-than-expected, with the employment change at 39.1k vs +20k exp and 15.2k prior (revised).
Asian stocks drop after Fed’s hawkish stance
The Asian equity markets tracked their Wall Street counterpart lower on Thursday, after the Fed hiked rates by 25bps for the first time this year and signaled faster pace of tightening in the year ahead, sending the greenback rallying across the board.
Gold dumped to fresh 10-month lows on hawkish FOMC
Gold is making minor-recovery attempts in mid-Asia, moving slightly from fresh ten-month troughs reached at $ 1136 post-Tokyo open.
Chinese state owned banks seen selling USD in onshore FX market – RTRS citing traders
Livesquawk reporting latest headlines via Reuters, citing that the state owned banks in China are seen selling USD in onshore FX market according to traders.
Key focus for the day ahead
Eurozone PMIs to gain a bit of ground heading into year-end - TDS
Analysts at TDS are looking for the Eurozone PMIs to gain a bit of ground heading into year-end and expect Germanys manufacturing PMI to rise to 55.0 (mkt 54.5), and France’s services PMI to rise to 52.2 (mkt 51.9) both for Dec.
SNB expected to remain on hold at Q4 meeting - Nomura
The Q4 Swiss National Bank (SNB) meeting on 15 December is likely to be uneventful, with the SNB probably on hold and the same forward guidance of an overvalued CHF likely to remain in place expects Research Team at Nomura.
GBP/USD off 2-week lows, re-takes 1.2550 ahead of BOE
The GBP/USD pair stalled its recovery from post-FOMC troughs over last hours, now consolidating near the mid-point of 1.25 handle, as investors now turn attention their attention towards the BOE monetary policy decision due later in the European session.
US CPI preview - Nomura
Analysts at Nomura explained that they expect headline CPI to show another decent increase of 0.2% (0.197%) m-o-m in November following a 0.36% advance in the previous month.