Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: The US dollar recovered slightly on Wednesday, after recording losses for four days.
What happened: Data released on Wednesday showed the world’s biggest economy expanding faster than expected during the third quarter.
However, the greenback remained on course to recording its biggest monthly decline in a year.
Why it matters: The US dollar rose from its weakest level in over three months during Wednesday’s session, following the release of GDP data.
GDP growth figures were revised higher for the third quarter, showing that the US economy had expanded at an annualised pace of 5.2%, above the preliminary reading of 4.9%. The figure also topped market estimates of 5% growth. The latest release also marked the strongest GDP growth since the fourth quarter of 2021.
While the healthy US GDP growth data supported the greenback, it also spurred speculations of the Federal Reserve announcing a rate cut as early as March, which limited the gains in the currency. Comments from Fed Governor Christopher Waller signalling prospects of a rate cut in the months ahead had triggered a US dollar sell-off.
Investors also monitored other economic reports from the US. The US trade deficit in goods widened to $89.8 billion in October, from $86.8 billion a month ago. Wholesale inventories slipped by 0.2% in October.
Despite some gains, the US dollar remained close to its weakest level not seen since mid-August and is on course to closing the month with around 3.5% losses, its biggest monthly decline in a year.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained slightly to 102.77 on Wednesday. The index fell to its weakest level since early August at 102.46, earlier during the Asian session.
The EUR/USD forex pair shed more than 0.2% to 1.0970 on Wednesday, following inflation data from Europe’s biggest economy, Germany. The data showed consumer price inflation easing to 3.2% year-over-year in November, from 3.8% in the previous month.
The NZD/USD gained on Wednesday, after the Reserve Bank of New Zealand kept interest rates unchanged at its latest meeting but warned of further policy tightening.
What to watch: Investors await the release of economic data on jobless claims and core PCE price index, the Fed’s preferred gauge to measure inflation, on Thursday. The number of people filing for unemployment benefits, which declined by 24,000 to 209,000 in the week ending November 18, is expected to increase to 213,000 in the latest week. Analysts expect US core PCE price index to rise by 3.5% year-over-year in October, compared to 3.7% in September.
Context: London’s FTSE 100 index fell for the third day in a row, following hawkish remarks from Bank of England Governor Andrew Bailey.
Details: Andrew Bailey said that the Bank of England will do “what it takes” to bring down inflation to its 2% target. “We are not in a place now where we can discuss cutting interest rates – that is not happening,” Bailey said in an interview with Daily Focus.
Shares of insurance heavyweights Aviva and Prudential moved lower on Wednesday, following bearish comments from brokerage firms. The life insurance sector declined around 1.7% on Wednesday, after Prudential’s shares tanked around 3.3% and Aviva’s stock fell more than 2%.
Shares of precious metal miners climbed amid the continuous rise in gold prices.
On the economic data front, UK’s mortgage lending declined for the second consecutive month in October, while mortgage approvals rebounded. Consumer credit in the UK increased by £1.289 billion in October, versus a revised £1.370 billion a month ago.
The blue-chip FTSE 100 fell 0.43% to close at 7,423.46, while the domestically focussed FTSE 250 index gained 0.44% to settle at 18,467.58 on Wednesday.
What to watch: With no major economic reports due for today, investors will watch data on Nationwide house price index and manufacturing PMI from the UK on Friday. The Nationwide House Price Index, which increased by 0.9% in October, is expected to rise by 0.4% in November. The S&P Global/CIPS manufacturing PMI is projected to increase to 46.7, from 44.8 in October.
Other Markets: US trading indices closed mixed on Wednesday, with the S&P 500 and Nasdaq 100 down by 0.09% and 0.14%, respectively, and the Dow Jones index up by 0.04%.
Russia’s Defence Ministry said its military forces have seized control of a village in the Donetsk area, which sent the RUB/USD pair higher in forex trading this morning.
Singapore bank loans rose to S$791.5 billion in October, from S$787.6 billion a month ago, which lent support to the SGD/USD forex pair.
China’s official NBS non-manufacturing PMI fell to 50.2 in November, from 50.6 in the previous month. However, this marked the 11th straight month of expansion in the service sector and sent the CNY/USD pair higher in forex trading this morning.
Japan’s industrial production rose by 1.0% in October, compared to a 0.5% increase in the prior month. This also topped market estimates of 0.8% growth and lent support to the JPY/USD forex pair.
New Zealand’s ANZ Business Outlook Index rose sharply to 30.8 in November, from 23.4 in the prior month. This being the strongest reading since March 2015 sent the NZD/USD pair higher in forex trading this morning.
Germany’s retail sales, number of unemployed individuals, unemployment change and jobless rate, Turkey’s GDP growth rate, foreign exchange reserves and MPC meeting summary, France’s consumer price inflation, producer price inflation and GDP growth rate, Eurozone’s inflation rate, unemployment rate and European Central Bank General Council Meeting, Italy’s jobless rate and inflation rate, Spain’s current account, South Africa’s producer price inflation and balance of trade, India’s GDP growth rate, infrastructure output, money supply M3 and central government budget value, Brazil’s unemployment rate, Canada’s CFIB business barometer long-term optimism index, average weekly earnings and GDP growth rate, Mexico’s unemployment rate, US personal income, personal spending, continuing jobless claims, Chicago business barometer, pending home sales and natural gas stocks change, Argentina’s consumer confidence indicator, as well as Russia’s money supply M2.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC – S.P.C (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates under First Category: Dealing in Securities and Fifth category: Arrangement and advice (Introduction). ADSS is a Limited Liability Company – Sole Proprietorship Company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
