Dollar Bulls: 3 Things To Be Thankful For

Dollar Bulls: 3 Things To Be Thankful For

Kathy Lien  | Nov 25, 2019 22:19

Kathy Lien, Managing Director Of FX Strategy For BK Asset Management

Daily FX Market Roundup November 25, 2019

This week, Americans will be thinking about all of the things that we can be thankful for. On the first day trading day of this shortened Thanksgiving week, the U.S. dollar is stronger against all of the major currencies. Dollar bulls in particular have a few reasons to be thankful this holiday seasoning. To start, the Federal Reserve has been very clear that barring any unforeseen shocks, further easing may not be necessary. U.S. data is starting to take a turn for the better and the Dow is trading near a record high. Americans are enjoying the combination of growing portfolio values and low interest rates and the hope is that this will translate into a healthier holiday shopping season. Black Friday deals are starting earlier than usual this year, which may help extend the period of demand. Fed Chairman Powell will be speaking later this evening and no major revelations are expected. However Tuesday’s new home sales and consumer confidence reports should be strong as they reflect the positive impact of low interest rates and housing data. USD/JPY had a very nice run toward 109 and while the pair stopped right at the 200-day SMA, the path of least resistance should be higher.

Meanwhile EUR/USD fell for the fourth consecutive trading day, coming within a few pips of 1.10. The euro was hit from all sides on Friday (weaker PMIs, ECB comments and stronger and while business confidence improved according to the German IFO report, the selling pressure remains strong. With that said, the IFO report has not fallen since August, which confirms our view that the economy is stabilizing. Auto tariffs are still a risk but the November 14 deadline has come and gone with no updates from President Trump.

In contrast, sterling snapped a 4-day slide to rise strongly against the euro and U.S. dollar. According to the Confederation of British Industry, consumer spending is picking up ahead of the holiday shopping season. This is very encouraging as the CBI index has a strong correlation with the broader retail sales measure. Sterling traders were also happy with the latest polls showing Tories with a comfortable lead over Labour.

The Canadian and Australian dollars pulled back but the New Zealand dollar held steady ahead of a busy trading week. Third-quarter retail sales numbers are scheduled for release from New Zealand tonight followed by the trade balance on Wednesday local time. We’ve been bullish NZD for some time and expect data to reinforce our view. However the 100-day SMA has limited gains for the past month and NZD find it difficult to push against a pro-U.S. dollar rally.

Kathy Lien

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

More markets insights, more alerts, more ways to customize assets watchlists only on the App is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.