Market Watch: Greenback is Mostly Firmer

Financial and commodity markets analytics

The dollar has remained in tight ranges against G10 currencies throughout the European morning. 
The news is sparse, except for the China deflation data and Japan's portfolio flow data which showed that Japanese investors purchased the largest amount of US Treasuries over the past six months in September. 
Yesterday, gold briefly fell below $1950 and today its losses have extended a little past $1945 Support can be found between $1925 and $1935. 
Yesterday, December WTI slid below the $75 level but is now above it.

Asia Pacific
In September, Japan posted a higher current account surplus of JPY2.72 Trillion (JPY2.14 Trillion in August). This was the highest surplus since March 2022. It is well known that the Japanese current account surplus does not depend on trade balance. Afterall, Japan is experiencing a trade deficit. Last year, the average monthly trade deficit reached JPY1.3 trillion. This year, the average monthly trade deficit has been around JPY 625 billion. 

Yesterday, the yen hit a five-day low, despite a softer yield on US 10-year bonds, which fell below 4.50%. The dollar recovered 61.8% of its three-day fall that started the month by regaining JPY151. In the morning of European time, it extended marginally yesterday's gains to nearly JPY151.20. 
Yesterday, the Australian dollar fell through $0.6400 during late North American trading. Today, it is trading in a narrow range of $0.6395 to $0.6410.

Five economic think tanks who advise the German government have delivered some more sobering information. Yesterday, they slashed their GDP forecast for this year to 0.4% (from 0.2% in March) and almost halved their forecast for next year to 0.7%. Germany's CPI national measure (as opposed the EU harmonized metric), has averaged 6.5% since October. 

The euro reached the 38.2% retracement from last week's rally near $1.0665. It recovered to reach new session highs near $1.0715, before consolidating over $1.07. 
Sterling, on the other hand, reached its (50%) retracement goal of last week's rally near $1.2260. Yesterday it dropped to nearly $1.2240, before recovering. The next retracement (61,8%) is just below $1.2225. Sterling held above $1.2280 and the recovery stopped around $1.2300.

There is a buzz about the thawing of US-Chinese ties. US Treasury Secretary Yellen is scheduled to meet China's Vice-Premier He. This week, US and Chinese officials held "constructive nuclear talks" with the US. Kerry, the special presidential envoy for climate change, is rumored to meet with his Chinese counterpart at the COP28 conference in Dubai starting end of the month. Biden and Xi could meet next week in San Francisco at the APEC Summit (though Beijing has not confirmed this). 

The US dollar has been consolidating within a narrow range of CAD1.3780 to CAD1.3805.