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Nov 16 - 05:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Firms As Dollar's Data Foundations Soften Further

By Paul Spirgel  —  Nov 16 - 02:05 PM

The USD index was settling a touch lower on the session ahead of the NorAm close, losing its strength after weekly U.S. jobless claims came in above forecast, which encouraged U.S. Treasury yields to resume their descent.

Lower Fed rate expectations continue to hold sway over the dollar as traders speculate on the timing of the U.S. central bank's widely expected pivot to lower rates, along with the scale and speed of cuts to follow.

EUR/USD was +0.1% at 1.0857 in NorAm’s early afternoon, with falling USD yields once again propping up the euro.

Today’s high 1.0896 is slightly above the Tuesday/Wednesday highs in the high 1.0880s.

EUR/USD bulls were running out of energy ahead of tipped option interest by 1.09.
While data may keep Fed rate cuts front and center, the ECB is also seen at the end of its hike cycle and on the precipice of cutting rates in April 2024, ahead of current Fed cut expectations.

USD/JPY moved off its early NorAm high at 151.30, falling to 150.47 in the afternoon as U.S.-Japan yield spreads narrowed.
USD bulls appeared unwilling to test whether the MoF would intervene near 152.
Despite the recent selloffs ahead of 152, the shallow pullbacks -- with USD/JPY supported near 150 -- do little to temper sentiment that a test of MoF resolve may be forthcoming.

GBP/USD backed off post-claims highs at 1.2455, falling to 1.2420.
Sterling bulls were unable to hold above the 200-DMA at 1.2442, but cable remains anchored by its daily cloud top and upper 30-day Bolli.

Falling Fed rate expectations have provided a welcome boost for GBP bulls as rate futures indicate the U.S. central bank is likely to cut rates at a faster pace than the BoE.
BoE’s Ramsden noted today that UK monetary policy will need to be restrictive for an extended period of time.

AUD and CAD moved lower on the back of falling commodities and lower global growth expectations.

Falling yields provided a boost for gold, which was up 1.3% at $1,985, and silver, +1.9% at $23.9.
Bitcoin fell 4.2% to $36.3k as selling flooded the market as BTC hit early highs near $38k.

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Refinitiv IFR Research/Market Commentary


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