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European Forex news roundup: The dollar rises ahead of inflation data

  • 10 November, 2021
  • 5:42 pm EET

European Forex news roundup: The dollar rises ahead of inflation data

European trade session forex news – 10 November 2021

 

In terms of headlines, it was a calm session as the market waited for the release of US inflation data at 1330 GMT.

The dollar strengthened across the board, with risk trades swaying slightly back and forth as shares erased their early decline from Asia, only to fall back again.

US futures fell 0.3 % at first before recovering, but are now down across the board again, with tech companies leading the slide in pre-market. The S&P 500 futures are down 0.3 % , the Nasdaq futures are down 0.5 % , and the Dow futures are down 0.2 % .

Bond rates climbed slightly higher after yesterday’s dip, with the market remaining cautious ahead of the big risk event later today.

The dollar climbed across the board in the forex market, with EUR/USD sliding from 1.1580 to 1.1545 as sellers reclaim near-term control, targeting daily support at 1.1525-29.

USD/JPY rose from 112.90 to 113.25, while GBP/USD fell further after falling from 1.3550 to 1.3490 during the session yesterday.

The antipodeans fared poorly in the more conservative risk environment, with AUD/USD remaining at lows around 0.7350-60 levels and NZD/USD sliding below the 0.7100 mark during European trading.

The US CPI report later won’t be a game changer in the inflation debate, but any unexpected misses/beats could give the market a little shock before we settle ahead of tomorrow’s partial US market vacation.

Morgan Stanley recommends short EUR/CAD positions targeting 1.35

Morgan Stanley reiterate their bullish bias on CAD on crosses

  • “We recommend investors position for continued CAD gains on crosses. October labor market data affirmed a positive trajectory in Canadian payrolls; we estimate that only 120k jobs remain to be filled to achieve the full labor market recovery the BoC is looking for to gauge progress toward sustainable closure of the output gap,”
  • “CAD trades well below levels implied by the recent rise in oil prices and yield differentials, a relationship we expect to recouple as the COVID-19 crisis fades and USD’s strong negative correlation to risk appetite continues to decline. We recommend short EUR/CAD positions, targeting 1.35,”

 

Markets News :

  • USD leads, NZD lags on the day
  • European equities mixed; S&P 500 futures down 0.3%
  • US 10-year yields up 2.7 bps to 1.476%
  • Gold down 0.4% to $1,824.70
  • WTI down 0.8% to $83.47
  • Bitcoin down 1.6% to $68,205

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