The USD Could be in for a Swing, But Twitter Will Need to be Silent

A quiet day ahead will leave the Dollar all the more sensitive to chatter on Twitter and today’s data out of the U.S, most of the major markets closed.
Bob Mason
USD/JPY daily chart, December 13, 2018

Earlier in the Day:

There were no material stats released through the Asian session this morning, leaving the markets to look to the 2nd half of the week for direction, with economic data out of Japan at the end of the week and some key stats out of the U.S, including consumer confidence numbers on Thursday there for the markets to contemplate.

Release of the November BoJ monetary policy meeting minutes, in the early hours of this morning, had a muted impact on the Yen, with the BoJ’s policy decision last week having provided nothing new for the markets to consider going into the New Year.

Risk aversion has plagued the major Asian currencies as the year comes to an end, with the Aussie and Kiwi Dollar struggling, concerns over the economic outlook and a dovish bias towards the global economic outlook  across the central banks weighing.

Throw in constant chatter from the Oval Office and the slide in the U.S equity markets and it’s of little surprise that the Japanese Yen has been the leader of the pack of late, with even gold beginning to find some upward momentum.

At the time of writing, the Japanese Yen stood at ¥110.34 against the U.S Dollar, down just 0.03% for the morning, with support coming from the prospects of another reversal in the U.S markets, the U.S futures in the red, weighing on the Asian equity markets through the session.

The Aussie Dollar was up 0.07% to $0.7041, with the Kiwi Dollar up 0.04% to $0.6730, the pair finding some support from a pickup in commodity prices through the morning.

The Day Ahead:

For the EUR, there are no material stats scheduled for release through the day, much of Europe still on holiday, with a lack of negative numbers likely to provide some further support to the EUR, as geo-political risks continue to abate across the Euro bloc following the Italian coalition government’s decision to tow the EU line with next year’s budget.

At the time of writing, the EUR was up 0.11% to $1.1405, with market risk sentiment to provide direction through the day.

For the Pound, there are also no material stats scheduled for release, with the UK on holiday, which should provide some support for the Pound, Brexit chatter and political angst from Parliament expected to be on hold through the week.

At the time of writing, the Pound up 0.21% to $1.2701, with a lack of key drivers through the day bringing $1.28 levels into play this week.

Across the Pond, economic data is limited to October house prices figures that will provide some direction for the Dollar, market sensitivity towards housing numbers rising amidst concerns of a possible slowdown in economic growth in the U.S.

With a lack of stats through the holidays, we can expect the Dollar to also respond to Redbook numbers due out ahead of the house price figures this afternoon.

At the time of writing, the Dollar Spot Index was up 0.02% to 96.598, with today’s stats and any Oval Office chatter to provide direction through the day.

For the Loonie, there are no material stats scheduled for release through the day, leaving the Loonie in the hands of market risk sentiment and the market’s outlook towards the global economy and demand outlook for crude that has weighed heavily on crude oil prices and BoC sentiment.

The Loonie was down 0.13% to C$1.3610 against the U.S Dollar at the time of writing.

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