Thanksgiving dollar rally ahead of EU inflation

FX markets have shown greater volatility, with volumes higher across G10 space than we’d normally expect to see over the US Thanksgiving holiday. The Us dollar has reversed most of its 100-point demise following the weaker US data readings this week and as we await the EU CPI reading for November.

The much-awaited decision from OPEC ignited downside pressure on the CAD and the NOK as the committee (as expected) decided not to cut oil production, which obviously has implications for countries on the brink of deflation. But it appeases those countries looking to stimulate their economies as importers of black gold.

Data out of Japan overnight was mixed. The CPI data came in slightly weaker at 2.9% versus the consensus of 3% as retail sales firmly beat expectations at 0.2% against the forecast of -0.6% with retail sales bang on at 1.4% with the Japanese jobless rate falling to 3.5%. This inspired the Nikkei to rally 1.23% as USD/JPY trades back on the 118 handle despite the month-end selling flow sighted from exporters.

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Author: Neil Looker, cief forex dealer at CityIndez.

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