FX Roundup: Dollar corrects against global crosses on weak data

According to official data, the index monitoring the confidence among US consumers declined from an upwardly revised 99.1 to 90.4 in November, comfortably below the 99.5 reading analysts had expected.

At 1611 GMT, the dollar fell against the yen by 0.28% changing hands at JPY122.50. Concurrently, the pound fell 0.40% against the dollar exchanging at $1.5063, while the euro rose 0.03% versus the greenback to change hands at $1.0638.

Continuing with major crosses, the greenback was broadly flat against the Swiss franc exchanging at CHF1.0174, staying above parity in its favour, ahead of the US Thanksgiving holiday on Thursday.

Jane Foley, FX strategist at Rabobank, said, “Although the Swiss franc has pared a large part of its gains vis-à-vis its major counterparts, a majority of market participants expects the Swiss National Bank to cut rates further.

“We also expect the SNB to cut rates by 25 basis points on 10 December, but think that there are certain boundaries to what the SNB could do and we think that the central bank will not go further than -1.25% in the near future.”

The greenback traded higher against selected commodities-linked currencies, including the Norwegian Krone by 0.03% changing hands at NOK8.6524, but fell by 0.65%, 0.43% and 0.30% against the Chilean peso, Brazilian real and Canadian dollar, changing hands at CLP$710.44, BRL3.7163 and CAD$1.3325 respectively.

Finally, the Australian dollar also rose against its US counterpart by 0.54% changing hands at US$0.7231, while the New Zealand dollar rose 0.20% versus the greenback changing hands at US$0.6534.

Assessing the market, Kit Juckes, head of forex at Societe Generale, said, “The risk is that short-term traders now get squeezed out of positions ahead of Thanksgiving. EUR/USD needs to break 1.0750 however, before our technical analysts are in the least bit excited about a correction.

“On the other hand, it’s worth keeping an eye on EUR/GBP in this context. This is the fifth time that this cross has bounced off support around 0.70 in 2015. At the very least, we favour shorts in GBP/USD over shorts in EUR/USD here.”