Kantox currency update: US dollar eases ahead of the G20 meeting
The US dollar has been trading lower over the last two days, weighed by a dovish turn on the Federal Reserve’s forward guidance, which has hinted to a slower monetary tightening pace in 2019.
The greenback, however, remains near mid-term highs, supported by the strength of the US economy and its safe haven condition ahead of the Trump – Xi meeting on this weekend’s G20 summit.
EUR/USD recovery finds resistance at 1.1400. The euro appreciated on Thursday for the second consecutive day, as the market starts to assume a pause on the Fed’s monetary tightening, and extended its recovery from Wednesday’s lows at 1.1265 to week highs at 1.1400. As at London market opening times, the EUR/USD is trading at 1.1385.
GBP/USD: consolidating around 1.2800. The pound’s recovery attempt from 1.2725 lows was limited at 1.2850 on Thursday with the investors holding their breath ahead of the parliamentary voting of the Brexit agreement on December the 11th. As at London market opening times, the GBP/USD is trading at 1.2780.
USD/JPY supported above 113.00. The dollar reversal from Wednesday’s high at 114.00 has been contained at 113.20, and the pair has consolidated around 113.50 ahead of the G20 meeting. As at London market opening times, the USD/JPY is trading at 113.45.
In the Calendar Today
Today, Eurostat will release the Eurozone preliminary Consumer Prices Index. Inflation trends are expected to remain well below the ECB’s target of price stability thus, the impact on the euro will be neutral to negative.
Apart from that, we there are some conferences from ECB and Fed officials scheduled, which might have a moderate impact on euro and dollar volatility.
10:00 GMT EUR: Consumer Prices Index (YoY) (Nov)
Previous: 2.2% Expected: 2.0%
10:00 GMT ECB: Merch’s speech
14:00 GMT Fed: Williams’ speech