Euro won back morning losses
On Tuesday, November 16, trading in the euro ended in decline. The euro fell 0.42% against the dollar to 1.1320.
In Asia, major currencies were trading in positive territory. The euro / dollar pair rose to 1.1385. Optimism in the market prevailed in the morning due to the positive online meeting of the leaders of the United States and China, as well as the signing by the American president of an infrastructure package worth $ 1 trillion.
In the eurozone, GDP for the 3rd quarter increased by 2.2% mom, on an annualized basis, the economy grew by 3.7%. Employment increased by 0.9% MoM and 2.0% in the third quarter of 2021.
After the release of British statistics, the euro came under pressure. Excellent employment data increased the likelihood that the Bank of England will raise rates in December.
The pound and gold renewed intraday highs, but then fell anyway, as the major currencies went into negative territory. Strong data on retail sales, manufacturing and housing market in the US indicates an earlier increase in the rates of the US Federal Reserve.
Industrial production accounted for 1.6% against an estimate of 0.7%. Manufacturing output accounted for 1.2% against an estimate of 0.7%.
St. Louis Fed President and FOMC member James Bullard said the Fed should become more aggressive in future meetings. If the bank accelerates its pace of quantitative easing cuts to $ 30 billion a month, it could provide room for rate hikes in the first quarter of 2022. Prepare the market for rate hikes.
Scheduled statistics (GMT +3):
At 13:00 Eurozone is to publish the final CPI data for October.
At 16:30, Canada will present the consumer price index for October. In the US, a report will be released with data on the number of building permits issued in October.
At 17:10, the President of the Federal Reserve Bank of New York, John Williams, will deliver a speech.
At 18:30, the US Department of Energy will publish data on oil reserves on November 5-12.
Federal Reserve Representative Michelle Bowman will speak at 19:00.
At 8:40 pm, FRS spokesman Christopher Waller and San Francisco FRB President Mary Daly will deliver speeches.
In Asian trading, major currencies renewed their lows. They are now showing mixed dynamics. The New Zealander and Briton won back all the losses and gained 0.25% against the dollar against yesterday's close.
The Briton jumped on inflation data. The UK's annual consumer price index exceeded forecasts. The consumer price index rose by 4.2% y / y against the forecast of 3.9%. The monthly consumer price index was + 1.1% against the forecast of + 0.8%. pound / dollar jumped to 1.3472 (+40 p.).
Many speeches by representatives of the US Federal Reserve are scheduled for the evening. Bullard surprised the market yesterday by allowing a rate hike in Q1 2022. If someone else joins him, the dollar rally will continue.
The euro / dollar pair is trading at 1.1307. The minimum of the day, week and month was fixed at the level of 1.1263. Sellers broke their stops on long positions below the 1.13 level. The price bounced upward by 47 points. It is believed that if the price recovers above 1.1330, sellers will start taking profits. The 1.1260-1.1300 zone is a strong support. If the price remains trading below the level of 1.1355 until the end of the week, then we are preparing for a fall to 1.1200.
Summary: on Tuesday, the euro fell against the US dollar. The dollar index hit a new multi-month high following statements from FOMC member James Bullard. The market is pricing in a rapid QE cut and rate hike in the first quarter of 2022.
On Tuesday, at trading in Asia, sellers tore stops on long positions below the level of 1.13. The price bounced upward by 47 points. It is believed that if the price recovers above 1.1330, sellers will start taking profits.