Nov. 17, 2016 (Tempus, Inc.) – The U.S. Dollar is holding on to its recent advances and is trending positively at the moment of writing following the release of good inflation data. Consumer Price Index figures fell in line with expectations and showed improvement from last month. Year-on-year growth fell in line with the estimated 1.6% and month-over-month registered at the exact forecast 0.4%.
Initial as well as Continuing jobless claims fell below expectations, a sign of continuing labor health. Steady numbers are certainly boosting the dollar’s prospects as we get closer to a potential rate hike in December. The Fed’s Yellen’s foreseen hawkish comments from earlier this morning are also helping the ongoing appreciation.
Oil prices rose with the news of another possible agreement between OPEC members to curtail production. Mexican Peso and Canadian Dollar are not likely to recover much ground, but their depreciation has slowed down. MXN is 2.8% away from its worst level on record and CAD is trading at it weakest level since March 1st.
The Pound is holding its tight ranges despite detrimental statements surrounding the Brexit process. Reactions to the terms of the separation have been strong recently, casting further doubt on a successful and mutually beneficial accord once Article 50 is invoked. Nevertheless, the UK economy does not want to hear it.
Fundamentals such as Unemployment and Retail Sales have exceeded expectations with the UK jobless rate falling to 4.8% and sales up 1.9%. We believe GBP has room for losses, especially weighing in policy divergence, but thus far post-U.S. election its downside risks have diminished.
The currency of the rising sun is currently trading around its worst levels since the beginning of June. Although JPY gained mostly from havoc in markets this year, it is down by 8.0% since election results came out last week.
In addition to markets flourishing, the Yen is now falling as a result of the Bank of Japan’s brand new fixed-rate operations buying program in which they will start purchasing unlimited two and five-year bonds at (-0.09%) and (0.04%). The approach is more of a statement since it got no offers and its goal is to control the yield curve in the midst of a turbulent bonds market this year.