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Dukascopy Market Review, US Session, 9th November

 Previous session overview

The euro remained strong against the dollar in early New York trading Monday, hovering around the psychologically important USD1.50 mark, after rising global stocks suggested markets would shake off last week's disappointing U.S. jobs data and continue to load up on risk.

Finance ministers and central bankers at this weekend's meeting of the Group of 20 industrialized and developing nations didn't mention currencies in their official communique, removing what had been a possible obstacle to placing bets on higher-yielding currencies.

The Dollar Index, a trade-weighted basket of six currencies, was at 75.109 from 75.784 late Friday. The index was flirting with nearly 15-month lows.

GBPUSD gapped higher and rallied for a high print at USD1.6846 absorbing semi-official offers at key tech levels; low prints in Asia at USD1.6615 were quickly bought to ignite the rally.

USDJPY failed to follow on higher with stronger equities overnight topping out at tech resistance at JPY90.28 before turning lower; low prints in Europe at JPY89.68 with the rate holding under the JPY90.00 handle in early New York.

Positive Australian housing data overnight sent investors interest into the Australian dollar, which lifted other higher-yielding currencies. The Australian dollar hit a two-week high, at USD0.9299, on the data that showed Australian housing-finance approvals rose 5.1% on the month in September, more than the 3% rise expected.

Market expectation

If U.S. stocks follow the lead of Asian and European exchanges, the euro and other higher-yielding currencies are likely to extend their gains against the dollar. U.S. stocks are expected to open higher.

EURUSD high print notched around USD1.5020 but very light flows in the pair on the move up, or at least, not a lot of noise, a trader says. Decent offers spied on 'the machine' to USD1.5025, perhaps damping the impact of earlier noted stops.

Pound getting pulled higher by euro-dollar's extended rally, though cable seen struggling to get a toe hold back above USD1.6800 at writing. Offers seen placed to USD1.6805, with further interest seen close behind at USD1.6815/20.

USDJPY deflating slowly with dollar slippage elsewhere but remaining above the overnight low notched at JPY89.70, but only by about 10 pips or so as risk-appetite from firmer US stocks offsets dollar weakness here. Flows light currently but chatter notes that exporter offers have been lowered to JPY90.25 area of overnight high. Break below JPY89.70 expected to flush a few light stops but area of JPY89.50 said to hold mixed interest as bids and stops conflict.

There are no key U.S. data Monday, which means the euro and other higher-yielding currencies should track the direction of the stock market.

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