US Data Weakness Hits USD

USD Lower on Data Weakness

The US dollar has come back under pressure over the last 24 hours as further data weakness has weighed on sentiment.  The ISM Non-Manufacturing reading was weaker than expected over November at 53.9 vs 54.5 expected, though at least remained in expansionary territory. The ADP employment change reading was also weaker than expected. Data came in at 67k jobs vs 137k expected, raising the risk of a weak reading in Friday’s NFP release. USD index trades 97.47 last.

EURUSD Higher on USD Weakness

EURUSD has been higher over the European session so far on Thursday as weakness in the USD allows for recovery in the single currency. In light of recent data weakness and comments from ECB’s Lagarde (who said the ECB remains committed to achieving its 2% inflation target), the outlook remains bearish for EURUSD. Currently trading 1.1091 last, and approaching the bearish trend line from mid-2018 highs.

GBP Breaking Out

GBPUSD continues to forge higher ground today after breaking out above the 1.3033 resistance. The latest UK elections polls show that the Conservative party remains in the lead with around a 10% lead on Labour. For now, price action seems to reflect the view that elections outcome will either result in Brexit being delayed further or Johnson’s deal being pushed through, keeping GBP supported for now.

SPX500 Recovering Well

Risk assets have continued to recover into the back-end of the week following initial weakness in response to concerns over US/China trade talks. The SPX500 has traded back up to 3117.53 today, recovering firmly off the 3069.48 lows. The recovery has been helped by a Bloomberg report suggesting that a US/China trade deal is still close, despite recent tensions over Hong Kong. This report comes after Trump spooked markets by suggesting that a deal might not come until after the US elections next year.

JPY & Gold Lower

Safe havens have been weaker today, in light of the ongoing recovery in equities prices, seeing both JPY and gold lower against the US dollar. USDJPY trades 108.94 last, still above the 108.84 level for now. XAUUSD trades 1474.60 last, down firmly off the 1500 level.

Oil Rallies – OPEC In Focus

Oil prices have continued to push higher into the final days of the week with crude recovering strongly off the 55 level tested last week. The EIA report released yesterday showed US crude stores falling by nearly 5 million barrels last week. Focus now shifts to the OPEC meeting which begins today and is expected to see the group announcing fresh production cuts. Crude trades 58.36 last, testing the recent highs around 58.61, which are holding as resistance for now.

Crude Keeps CAD Supported

USDCAD has been lower across the European session so far on Thursday. Weakness in USD, on the back of further data misses yesterday, as well as strength in oil prices, is boosting CAD here. USDCAD trades 1.3184 last. Along with the OPEC meetings getting underway today, CAD traders also get domestic trade balance data which could offer some movement.

AUD Down on Data Dump

AUDUSD has been lower today despite the pick-up in risk appetite and recovering optimism over a US/China trade deal. Data overnight showed a weaker than expected retails sales print for the last month as well as a far smaller-than-expected trade surplus of just 4.5 billion AUD (vs 6.5 billion AUD forecast). AUDUSD trades .6833 last.