Kantox currency update: China weighs on dollar recovery
Dollar recovery from 3-month lows was halted on Wednesday, with the Greenback taking the worst one-day decline in months after the release of a report pointing out that China would be considering reducing or even stop buying U.S. Bonds.
EUR/USD spikes up to 1.2020. The euro bounced up from lows around 1.1915, and surged about 100 pips on Wednesday, with the U.S, dollar weighed by news from China, although the USD managed to pare losses over the last sessions, returning to the lower range of 1.1900. At London market opening times, the EUR/USD is trading at 1.1930.
GBP/USD breaks below 1.3500 support. The pound retreated on Wednesday, breaking below the lower limit of the last two weeks’ trading range, at 1.3500, with investors closing positions ahead of the release of the UK inflation figures next week . At London market opening times, the GBP/USD is trading at 1.3475.
USD/JPY dives to 7-week lows near 111.00. The dollar plummeted against the yen, crushed by Chinese Government’s new stance towards U.S. debt, and extended its reversal from 113.40 highs last week, to 111.25 lows. At London market opening times, the USD/JPY is trading at 111.80.
In the Calendar Today
At 10:00 GMT, the Eurozone industrial production will show the performance of the factory sector in November and might have a minor impact on euro volatility.
At 12:30 GMT the focus will be on the ECB monetary policy meeting accounts. The investors will be attentive on the economic perspectives of the committee members to assess whether the bank will definitely exit its bonds buying program in September. In that sense, a positive on the economy might help the euro to advance further.
10:00 GMT EZ: Industrial Production (MoM) (Nov)
Previous: 0.2 % Expected: 0.8%
10:00 GMT ECB monetary policy meeting accounts