The US Dollar finds some support during the Asian session as Fed officials comment the central bank still has "a way to go" with rate hikes. Investor focus this week shifts to the UK Autumn Budget on Thursday.
November 14, 2022
GBP/USD 1.1786 GBP/EUR 1.1421 EUR/USD 1.0320 USD/CAD 1.3288 EUR/CHF 0.9757 EUR/SEK 10.7336 EUR/NOK 10.2926 EUR/DKK 7.4384 USD/ILS 3.4204 AUD/USD 0.6688 NZD/USD 0.6090 USD/SGD 1.3740 USD/JPY 140.11 USD/CNH 7.0448 USD/INR 81.2150 EUR/ILS 3.5309 GBP/ILS 4.0306 USD/ZAR 17.2833
Focus this week will turn to the much anticipated delivery of the Autumn Budget on Thursday and the potential impact on the UK economy. The office for Budget Responsibility has warned Jeremy Hunt that UK public borrowing is likely to be around £70bn larger than expected, with estimates that it could reach £100bn in 2026-27. The Chancellor is expected to announce a big package of spending cuts and tax increases in a bid to tackle forecasts.
Sterling gained 4% against the greenback last week before declining 0.35% this morning, whilst the FTSE has opened the week 0.65% higher as risk sentiment continues to improve following Thursday’s US CPI data.EUR
The Euro was another currency to gain from a weaker dollar last week, with the pair trading over 4% higher to reach 3 month highs of 1.0363. Traders will focus on today’s industrial production numbers and statements from ECB members.
Natural gas prices rallied as temperatures are expected to cool in the coming weeks. The Stoxx Europe 600 trades 0.3% higher this morning led by an increase in mining stocks.USD
Last week closed with a notable rise in risk appetite, with the Dollar index losing 4.39% over the period. Stronger than expected inflation was the catalyst for the move, with increasing government bond purchases and a drop in treasury yields the result. The Dollar climbed briefly during the Asian session, following comments from Fed Governor Christopher Waller that the central bank was not intending to soften its fight against inflation.
US futures declined this morning, with the S&P and Nasdaq down 0.2% and 0.4% as investors remain defensive over inflation .ASIA/PACIFICThe Yen decline 0.8% during the Asian session as investors digested comments from Fed Governor Waller. Despite the decline, the Yen still trades up on the Dollar with last week saw seeing the biggest gain since 2008, surging around 6% following a change in risk sentiment.
China have introduced a new plan to rescue its real estate sector, with the package intending to increase the probability of a soft landing to 85% from 70%. The plan aims to add funding for developers whilst adding more flexibility for mortgage extensions. This along with relaxed Covid restrictions has boosted sentiment, with the offshore Yuan trading 1% higher against the Dollar and the Hang Seng up as much as 4.6% in this morning's session.ILSAfter reaching highs of 3.5550 last week, USDILS has dropped 3.4% to trade around 3.4250 at time of writing.
Israel's president formally asked Prime Minister Benjamin Netanyahu to form a government yesterday, with what is expected to be Israel's most right-wing coalition ever.Data & EventsEuro Area - Industrial Production
ECB members speak
US - Fed members speak
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