The U.S. dollar opens this morning in familiar ranges this morning as the safe-haven currency remains on the backfoot.
Global equity markets have ripped higher this month and jumped another leg higher yesterday. The DOW industrial average touched 30K for the first time in history yesterday as the transition of power commenced in Washington, more good news was released around a possible COVID-19 vaccine, and as the market cheered the appointment of Janet Yellen as the next Treasury Secretary. Equity futures are a touch lower today, but the dollar has not been able to make any significant inroads this morning.
With all markets closed tomorrow for Thanksgiving, the economic docket was pushed up. There is a slew of data slated for this morning and the results so far are mixed. Weekly jobless claims jumped to 778K last week, the highest reading in five weeks and higher than economists expected. Continuing claims were also slightly worse than expected with over six million Americans still receiving benefits. Durable goods orders are the bright spot this morning, with orders rising 1.3%, beating estimates of 0.8%.
Personal spending and income, new home sales, and core PCE will all be released at 10 a.m. Minutes from the last Fed meeting will cross the wire at 2 p.m. We expect trading volumes to decrease dramatically this afternoon as Europe goes home and American traders (this one included) sign off for the holiday.
What to Watch Today…
- Personal spending and income at 10 a.m.
EUR/USD spiked higher overnight and pushed towards a two-month high before quickly reversing those gains. Overall, the Euro remains elevated against the U.S. dollar. There are several reasons including general dollar weakness, optimism over a Brexit deal next month, and a breakthrough on European joint debt earlier this month.
The Euro is less than 1% away from a key fundamental and psychological level. The last time it was breached at the beginning of September, European Central Bank officials verbally intervened to help weaken the Euro. We will be watching closely to see if the Euro has the legs to materially break higher and hold new, stronger levels. If it does so, we can expect the common currency to continue to trade up to two-year highs in short order.
The Canadian dollar is slightly lower this morning but remains close to a two-week high and the strongest level of the year. The price of oil is higher today suggesting that the slight hiccup for the loonie may be short-lived. There is no major economic data slated for release in Canada today so USD/CAD may take its lead from the prevailing risk sentiment and American data.
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