Forex: USD edges down; high-beta currencies rebound
10:37, 15 November 2021
The US dollar (DXY) is slightly weaker at the start of Monday’s London trading hours as US consumer confidence unexpectedly fell in November.
US Treasury yields retraced after last week’s jump, with the 10-year yield at 1.56%.
EUR/USD is up 0.1% at $1.1452, GBP/USD is up 0.17% at 1.3436, while high-beta currencies such as the Australian (AUD) and the New Zealand Dollar (NZD) gained 0.5% and 0.47%, respectively, against the greenback.
The Japanese yen (JPY) continues to trade close to its 12-month lows against the dollar on the back of growing expectations of interest-rate differentials.
The Norwegian krone (NOK) is the best performer among majors, up 0.5% against the dollar and 0.4% against the euro.
Elsewhere, commodity-related emerging currencies rebound from last week sell-off, with the South African rand (ZAR) and the Russian ruble (RUB) up 0.67% and 0.64%, respectively against the dollar.
What is your sentiment on USD/TRY?
Forex daily matrix – 15 November 2021
Forex daily matrix as of 15 November 2021, 10:30 UTC – Source: Capital.comUS dollar
As of 10.30GMT, the US Dollar index (DXY) was at 95.02, down 0.1% on the day.
On Friday, the November’s Michigan Consumer Sentiment index fell by 4.9 points or 6.8% to 66.8, below market expectations (72.5), signalling a worsening in US consumer confidence.
On the data front, investors will be closely following October’s retail and industrial production prints due tomorrow, while several Fed members (Mary C. Daly, Michelle W. Bowman, Christopher J. Waller and Richard H. Clarida) are scheduled to speak this week.
On expectations of interest-rate hikes, market-based probabilities indicate a 67% chance that the Fed will begin to raise interest rates in June next year, compared with 42% a month ago.
DXY technical levels:
- 52-week high: 95.22
- 52-week low: 89.212
- 50-day moving average: 93.72
- 200-day moving average: 92.12
- 14-day Relative Strength Index (RSI): 64.58
Euro
The euro is broadly flat against the US dollar (EUR/USD) and the British pound (EUR/GBP). It found a floor at $1.1433 but continues to trade in a low 52-week range.
The single currency was negatively affected by fears about the rise in Covid-19 cases in Europe, which could pose a danger to consumer confidence in the winter. The Netherlands has just announced a partial lockdown, while Austria has placed the unvaccinated population under lockdown.
Daily new cases of Covid rose to 280,000 per day last week, reaching roughly the peak of 290,000 daily cases recorded in November 2020.
Investors await ECB President Lagarde’s intervention in the EU parliament today.
EUR/USD technical levels:
- 52-week high: 1.2349
- 52-week low: 1.1455
- 50-day moving average: 1.1645
- 200-day moving average: 1.1877
- 14-day Relative Strength Index (RSI): 34.60
Chart of the day: Continental Europe is in the middle of a fourth Covid wave
Daily new confirmed COVID-19 cases per million people (7-day rolling average) – Credit: Our World in DataBritish pound
GBP/USD is up slightly at $1.3441 (+0.2%) from its previous close.
Today, the Bank of England governor Andrew Bailey will be testifying to the UK parliament’s Treasury Committee, together with chief economist Huw Pill and external Monetary Policy Committee (MPC) members Michael Saunders and Catherine Mann.
GBP/USD technical levels.
- 52-week high: 1.4248
- 52-week low: 1.3104
- 50-day moving average: 1.3666
- 200-day moving average: 1.3842
- 14-day Relative Strength Index (RSI): 36.33
Forex performance heat map – 15 November 2021
Forex Performance heat map as of 15 November 2021 10:30 UTC – Source: Capital.com