EUROPEAN FX UPDATE: USD knocked lower by the post-inflation strength seen in JPY

USD: DXY 105.93 -0.1%

• USD was knocked lower by the stronger JPY (see below section for details). Given the Thanksgiving Holiday yesterday and the likelihood that most traders Stateside will take it as a long weekend, today's US macro narrative is likely to remain unaltered. The next key inflection point is likely to come via NFP next Friday. DXY has been as low as 105.61 with the next potential level of support via the 12th low @ 105.48.

EUR: EUR/USD +0.1%; 1.0560

• EUR/USD trades trivially firmer vs. the USD with focus for the Eurozone on inflation metrics which saw an-line print for the headline at 2.3%, whilst the super-core was a touch softer at 2.7% vs. Exp. 2.8% and the service metric nudged lower to 3.9% from 4.0%. ECB pricing was little changed with odds of a 25bps move at the December meeting seen at around 84%. EUR/USD went as high as 1.0597 in early trade as the USD faced a bout of selling pressure before running out of steam ahead of the 1.06 mark; not breached since November 20th.

JPY: USD/JPY -0.9%; 150.22

• JPY the standout outperformer across the majors on account of firmer Tokyo inflation metrics overnight which act as a precursor to the nationwide report. As such, the narrative of a December rate hike has continued to firm with a 25bps hike priced at around 56%. USD/JPY briefly crossed below 150 for the first time since October 21st with a session low @ 149.55.


• Tokyo CPI YY (Nov) 2.6% vs. Exp. 2.2% (Prev. 1.8%), CPI Ex. Fresh Food YY (Nov) 2.2% vs. Exp. 2.1% (Prev. 1.8%), CPI Ex. Fresh Food & Energy YY (Nov) 1.9% vs. Exp. 1.9% (Prev. 1.8%).

GBP: GBP/USD U/C; 1.2685

• Cable briefly made its way back onto a 1.27 handle following the broadly softer USD with UK-specific newsflow having been particularly light this week. Cable has been as high as 1.2749 with the next upside target coming via the 13th November peak @ 1.2769.

Antipodeans: AUD/USD +0.1%; 0.6508. NZD/USD +0.4%; 0.5912

• NZD outpacing its antipodean peer in a slight extension of the outperformance seen since the RBNZ rate decision. NZD/USD has moved back onto a 0.59 handle and above its 21DMA @ 0.5909 with a current session peak @ 0.5928. AUD/USD is holding above the 0.65 mark with the next target coming via its 21DMA @ 0.6531.

29 Nov 2024 - 10:25- ForexEU Research- Source: Newsquawk