EUROPEAN FX UPDATE: JPY's resurgence continues, NZD boosted post-RBNZ

USD: DXY -0.3%; 106.50

• Hampered by the resurgence in the Yen (see below for details). Accordingly, DXY has slipped further onto a 106 handle and briefly slipped below yesterday's low @ 106.49. Today's US data slate is exceptionally busy on account of tomorrow's Thanksgiving holiday. The docket includes monthly and quarterly PCE metrics, the 2nd estimate of GDP, weekly claims data, durable goods and trade. The highlight will be the monthly PCE metrics with the core M/M rate expected to remain at 0.3%. As it stands, around 16bps of loosening is priced for the December meeting.

EUR: EUR/USD +0.3%; 1.0515

• EUR firmer with support lent by hawkish comments from ECB's Schnabel who says she sees only limited room for further rate cuts, adding that the ECB should not go accommodative on rates. As such, only around 30bps of policy loosening is priced for the December meeting vs. the 38bps seen at the start of the week. ECB's Lane is due to speak later. EUR/USD has made its way back onto a 1.05 handle but has topped shy of yesterday's 1.0544 peak.


• EUR/USD opex: 1.0400-10 (3.8bln), 1.0450-60 (2bln) 1.0475 (1.5bln), 1.0485-90 (1.6bln), 1.0500 (4.9bln), 1.0525 (610mln), 1.0550 (806mln).

JPY: USD/JPY -1.1%; 151.35

• Yesterday's strong showing by the JPY has continued into today's session with USD/JPY slipping below the 152 mark which coincided with the pair's 200DMA. From a fundamental perspective, traders continue to position for a BoJ rate hike next month following the recent fiscal stimulus announcement by the Japanese government; 25bps hike is priced at 61%. In terms of downside targets for USD/JPY, the MTD low sits at 151.27 vs. the current session trough @ 151.36.

GBP: GBP/USD +0.2%; 1.2595

• GBP firmer vs. the broadly firmer USD with UK-specific updates on the light side as recent BoE interjections from Pill and Lombardelli failed to move the dial. Cable briefly made its way back onto a 1.26 handle, topping out @ 1.2616 (matching yesterday's peak) before fading gains.

Antipodeans: AUD/USD +0.2%; 0.6483. NZD/USD +0.9%; 0.5889

• NZD is top of the G10 FX leaderboard following the RBNZ's 50bps rate cut overnight, which was widely expected, although there were outside bets for a greater 75bps reduction, while the central bank's rate projection for the OCR in December 2025 was at 3.55% which was higher than what money markets are currently pricing. NZD/USD surged following the release but met resistance at 0.59.


• AUD is higher vs. the USD but to a lesser extent than its Antipodean peer following mixed data releases overnight in which Australian monthly CPI printed softer-than-expected, the trimmed mean metric rose and Q3 Construction Work Done topped forecasts. AUD/USD is currently tucked within yesterday's 0.6433-0.6507 range.

27 Nov 2024 - 10:05- ForexData- Source: Newsquawk