Forex Analysis

Seasonal Greetings

With around 25 working days left before the end of the year, poorer liquidity and institutions winding down their portfolios and

FX Daily

Market movers today * Germany releases the first inflation data for November. The annual inflation rate (HICP) is expected to rise slightly to 1.4% (consensus 1.3%) from 1.2% in October.

EUR/USD Analysis

The pair traded between $1.3559 and $1.3609 last night in the US, and opened in Asia at $1.3573 this morning, supported largely by euro-yen demand persisting since the NY afternoon session,

GBP/USD Analysis

The pair closed in NY Wednesday at $1.6287 after rate had been lifted to intraday highs of $1.6331 on the back of general dollar sales into the Thanksgiving holiday/end month.

AUD/USD Analysis

Aussie opened at $0.9080 this morning after another weak overnight session which saw the aussie drop to a $0.9065 low.

JPY started in Asia with continued weakness, as dollar-yen opened at Y102.15 while euro-yen opened at Y138.66. Dollar-yen gained in early trade, powered along by a strong open in Japanese stock markets.

GBPUSD – bull flag breakout coincides with 2011 d/t break

The range high failure on Monday followed with a sharp decline but the quick reversal has since seen a significant breakout.

USDJPY – bull flag rally to upside confluence zone at 102.45/65

Today we hone in on the wave count from the end of the 5-month coil. This rally from 96.57 is expected to carry prices towards 104/106 in to next year.

EURUSD – correction targeting deep retracement at 1.3636

Our call for a new leg lower in Euro beginning at 1.3579 on 11/19 was squarely negated last night; we closed shorts.

Central European Daily

NBH cut base rate to new all time low… … forint remains stable The National Bank of Hungary cut the base rate by 20bp from 3.4 % to 3.2 % in line with prevailing market expectations.

Morning FX Market Commentary

Dollar stays in the defensive The dollar stayed under slight pressure yesterday. The US data were mixed, but currency markets focused on a poor US consumer confidence release.

It is time for more nuance in EM FX

This time is different. EM FX will not perform despite a global economic recovery, because of the need to address imbalances, and because high and sticky inflation means tighter policies will be needed,