- EUR/USD: Sell
- The EUR/USD pair continues to trade near 1.0590 with mixed activity. While market activity is strong, investors remain uncertain about the trend direction following the corrective rise earlier in the week.
- European Data:
- October Core CPI: +0.2% MoM, +2.7% YoY (as expected).
- Broad CPI: +0.3% MoM, +2.0% YoY.
- In the U.S., October building permits dropped significantly from 1.325M to 0.600M, below the expected 1.430M. Housing starts also decreased from 1.353M to 1.311M.
- Focus: The U.S. and Eurozone November PMI data for manufacturing and services will be released on Friday.
- GBP/USD: Sell
- The GBP/USD pair is showing an upward trend near 1.2690, marking the highest level since November 14.
- UK Inflation Data:
- October CPI: +2.3% YoY (forecast +2.2%), +0.5% MoM (previous 0.0%).
- Core CPI: +3.3% YoY (above forecast of +3.1%).
- Producer Price Index (PPI): +0.0% MoM, -0.8% YoY.
- Attention is also on U.S. unemployment claims and October existing home sales (expected 3.93M).
- NZD/USD: Sell
- The NZD/USD pair is trading sideways near 0.5900. While there may be short-term upside potential due to USD weakness, long-term expectations are for a 50bps rate cut by the Reserve Bank of New Zealand (RBNZ) in December.
- New Zealand:
- Q3 Producer Price Index (PPI): +1.9% QoQ (previously +1.4%).
- U.S. building permits and housing starts’ decline are exerting pressure on the USD.
- USD/JPY: Buy
- The USD/JPY pair is attempting to break above the psychological level of 155.00 again.
- Background:
- U.S. President Trump has pledged to introduce high tariffs on European and Chinese products, which may accelerate inflation in the U.S.
- Japan’s BoJ Governor Ueda has refrained from commenting on potential changes to monetary policy at the December meeting, but a 25bps rate hike is considered a 50% possibility.
- Focus: Japan’s October exports rose +3.1% YoY, surpassing expectations, but the trade balance deficit expanded to -461.2 billion yen.
- XAU/USD: Strong Buy
- Gold prices continue to trade sideways around 2635.00. Gold remains supported as a safe haven asset, with expectations of a 25bps rate cut by the Federal Reserve in December, which could help support gold prices.
- Background:
- President Trump’s tough trade policies have raised concerns about slower pace of rate cuts.
- Russia’s approval of new nuclear strategies also increases geopolitical risks.
- Focus: U.S. November PMI data is due on Friday, with manufacturing PMI expected to improve to 48.8 and services PMI to 55.3.
