The North American economic developments of yesterday are the basis for today's events. The dollar has been trading in tight ranges and is holding onto yesterday's gains despite UK GDP numbers that were better than expected. The dollar is up this week against all G10 currencies.
Gold has been consolidating within a small range of $1951.60 to $1960.85. Last week, it settled at $1992.65.
WTI is still trading in the same range of $74.90-$77.55 as seen on Wednesday. It ended last week at around $80.50. It will be the longest losing streak since six months if there is no strong rally in North America.
Today, the regional session was relatively quiet due to the lack of news. Next week, there are three major events. China will report its October economic activity. Japan is expected will report a slight contraction of Q3 GDP. Third, Australia will report its employment status for the last month. The central bank raised rates last week, and pricing on the swaps and futures markets is consistent with an end to the tightening cycles.
The yen was not overly affected by the recent dollar rally in North America and the increase in US interest rates. The dollar climbed to JPY151.40 but only by a small amount. Today, the greenback remains firm but gains are limited to JPY151.50.
The Australian dollar has continued to retrace the recent rally. It is currently slipping to near $0.6350.
The UK's GDP numbers were better than expected. The UK economy grew by 0.2% after an initial 0.2% and a revised version of 0.1% for August. The economy grew faster than expected in September, with construction and services outperforming expectations. Industrial output was flat. Also, the trade deficit decreased. The British economy stagnated in Q3 instead of the expected small contraction. Bloomberg's median forecast predicts another two quarters of stagnation.
The euro has found some support near $1.0655 today. Sterling's losses yesterday were not stopped by slightly better-than-expected GDP figures. Around $1.2200, it is approaching support.
Initial weekly jobless claims are still low. The consumer has dropped after a Q3 shopping spree. Retail sales in October may have dropped for the first since March. This, along with a drop in industrial production, will confirm the belief that the US economy has slowed sharply during the last quarter of the year.
The dollar rose from CAD1.3770 up to CAD1.3815. The dollar settled at CAD1.3800. Today, it is trading in a very narrow range between CAD1.3790 to CAD1.3815.