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AUS Economy Sheds 15,600 Jobs in November Australia economy shed 15,600 jobs in November and the unemployment rate climbed to its highest level in a year. This piece of data will put pressure on the RBA to continue cutting rates in order to prop up the economy. The decline in jobs was the biggest since May. The RBA next meets on February 3rd and is expected to cut rates by 50 to 100 basis points. AUD/USD - Aussie Climbs as Greenback Faces Selling Pressure
Despite the weaker Aussie employment data the Australian Dollar surged against the Dollar. From a daily low near 0.6540 the pair rose 230 pips to test the 0.68 level. There was general greenback weakness overnight which was accelerated by poor US fundamental data which we will get to later in the broadcast. SWZ Swiss National Bank Cuts Rates to 0.5% The Swiss central bank cut its benchmark rate by 50 basis points to 0.5% in response to weakening economic activity and fears of a possible recession in the country. That brings the rate to a 4-year low and follows an unscheduled 100 basis point cut on November 22nd. EUR/CHF - Euro Climbs 190 Pips vs Franc Amidst SNB Rate Cut
The Euro was a strong performer today, as ECB member Stark signaled policy makers are reluctant to keep cutting interest rates aggressively. The Euro-Swiss Franc pair was able to break out of its sideways pattern to climb to the 1.58 level. That was a 190 pip breakout from resistance around 1.5610. The Franc did continue its gains against the Dollar, which was losing across the board. EUR/GBP - Euro Reaches New All Time High vs Pound
Staying with the Euro, it hit a new all time high against the Pound slightly above the 0.89 level, after a 100 pip move overnight. This continues a two week long uptrend in the pair that began on December 1st around 0.8250. US Jobless Claims Hit 26 Year High Turning to the US, the labor department said that the number of American filing initial claims for unemployment benefits rose to 573K, an increase of 58K compared to the previous week. It's the highest amount of new claims in 26-years. The number of people continuing to claim benefits rose to it's highest level in 34 years, as 4,429,000 remained on the rolls.
US Import Prices Decline Record 6.7%
The U.S. Import Price Index fell for the fourth consecutive month, declining 6.7% in November. That decline was the largest one-month drop since the index was first published monthly in December 1988. US Trade Deficit Grows, Surprises Forecasts In a third release, the US trade deficit widened for the first time in 3 months, increasing to -$57.2 billion. A record increase in the quantity of oil imported offset falling oil prices and plunging car sales. The figure was much bigger than expected. EUR/USD - Euro Roars to 400 Point Climb
The Euro-Dollar pair surged today, climbing 400 pips from its open to set a new 7-week high at 1.34. The Dollar was pressured overnight, and the weak trade and jobs data added extra strain. The Libor rate, or the cost of borrowing in dollars between banks, fell to its lowest level since September 2004. There seems to be a sense that the absolute panic that gripped markets in October are starting to cool and traders may be unwinding some of their Dollar longs. USD/JPY - Yen Reaches 91.15 a Greenback Pressured
The Dollar-Yen pair slid 160 pips to set an intra-day low at 91.15. That is the lowest level for the pair since October 24th. US equity markets started lower, though the Dow managed to crawl back into positive territory, which helped the greenback pare some of its earlier losses. With the Dollar down, oil prices climbed to the $48 a barrel level. CAN Trade Balance Narrows Less Than Expected In Canada, the Canadian trade surplus narrowed less than expected in October. Exports outpaced imports by C$3.8 billion. The better than expected figure was a positive sign for Canadian economy, but trade will remain pressured in the 4th quarter. CAN Housing Prices Decline in October In a second release, the new housing price index fell 0.4% in October on a monthly basis and cooled to 1.5% in annual terms. Falling housing prices reflect a weakening housing market as the Canadian economy strains in the face of a global recession. USD/CAD - Loonie Surges 400 Pips vs Greenback
The Canadian Dollar strengthened against the Greenback on its better than expected trade news and on the weak US fundamental data. Also, with oil gaining sharply that was another factor helping the Loonie. The US Dollar-Canadian Dollar pair fell around 420 pips during the session, setting a new 3 week low near 1.2160, before rebounding about half-way in later NY trading. Upcoming Releases In upcoming releases, New Zealand releases retail sales data today and Japan posts data on industrial production and consumer confidence. Overnight we get industrial production data from the Euro-zone. Tomorrow, the US will release retail sales, producer prices, business inventories, and the preliminary version of UMich consumer sentiment. |
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*Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts. |
