Dollar strenghtens in quiet trading

27 December, 2016

The post-Christmas trading started quietly with the USD that slightly strenghtens to its major peers. The weakest currency on the fx market is now the Japanese Yen as the USDJPY defended a support at 117.00.

The yen halted a four-day advance, while oil continued its longest winning streak in four months as some major financial markets reopened after a long holiday weekend.The yen slipped after climbing 0.7 percent over the previous four sessions. As for the other markets,   stocks in Japan and China fluctuated. Financial markets in Australia, New Zealand and Hong Kong are shut on Tuesday, while those in the U.S. and most of Europe will resume trading after a holiday Monday. Trading is expected to be thin this week as financial markets close out a volatile year.

Japanese consumer prices rose for the second consecutive month in November, although core prices continued to decline in the latest sign of strong deflationary headwinds for the world’s third-largest economy. The national consumer price index rose at an annualized 0.5% in November, following a 0.1% year-over-year gain in October, the national statistics bureau reported on Tuesday. The national CPI index in October recorded its first increase in nine months.

Profits earned by China’s industrial firms continued to accelerate in November, rising 14.5% from a year earlier, the National Bureau of Statistics  said on Tuesday. The latest industrial profit figure of 774.6 billion yuan  which covers large enterprises with annual revenues of more than 20 million yuan from their main operations, follows a 9.8% year on year increase in October and a 7.7% rise in September. Overall, industrial profits climbed 9.4% in the first 11 months from the same period a year earlier, to 6.03 trillion yuan, up from an 8.6% rise in the first 10 months of the year.

The European Central Bank has told Monte dei Paschi di Siena that its capital shortfall is €8.8 billion, significantly raising the amount the Italian government will have to deploy to rescue the troubled lender. In a statement Monday evening, Monte dei Paschi said that the ECB said the bank’s capital shortfall is far higher than the €5 billion expected when the government organized a rescue last week of Italy’s No. 3 lender.

The NZDUSD is on on the back foot today after the cross re-tested previously broken support. Looking at the D1 chart it’s hart to be optimistic on the pair’s future. A clear break below 0.69 suggests more downisde ahead with a focus at 0.66. Buyers will probably re-emerge close to 0.6750, but the strongest supported is the one that is located 150 pips lower.


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