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Here is what you need to know on Thursday, December 7:
The US Dollar (USD) Index extended its winning streak on Wednesday and advanced to its highest level in nearly three weeks above 104.00. Challenger Job Cuts for November and the weekly Initial Jobless Claims data will be featured in the US economic docket on Thursday. Earlier in the day, Eurostat will release revisions to third-quarter Gross Domestic Product growth and Employment Change.
On Wednesday, the data from the US provided more signs of a cooling labor market but the cautious market stance helped the USD preserve its strength for the third consecutive day. ADP Employment Change for November came in at 103,000 to miss the market expectation of 130,000 and Unit Labor Costs declined by 1.2% in the third quarter, at a faster pace than analysts’ estimate of 0.9%. Nevertheless, Wall Street’s main indexes closed in negative territory and US stock index futures struggled to gain traction in the Asian trading hours.
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
USD
EUR
GBP
CAD
AUD
JPY
NZD
CHF
USD
1.16%
1.28%
0.86%
2.16%
0.10%
1.46%
0.91%
EUR
-1.18%
0.13%
-0.30%
1.03%
-1.08%
0.33%
-0.24%
GBP
-1.32%
-0.12%
-0.43%
0.89%
-1.21%
0.18%
-0.38%
CAD
-0.86%
0.31%
0.44%
1.33%
-0.78%
0.63%
0.07%
AUD
-2.21%
-1.03%
-0.90%
-1.34%
-2.14%
-0.71%
-1.27%
JPY
-0.13%
1.09%
1.34%
0.79%
2.10%
1.39%
0.81%
NZD
-1.48%
-0.31%
-0.19%
-0.61%
0.71%
-1.38%
-0.56%
CHF
-0.94%
0.25%
0.37%
-0.05%
1.26%
-0.82%
0.55%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Early Thursday, the General Administration of Customs of the People’s Republic of China reported that the trade surplus expanded to $68.39 billion in November from $56.53 billion. This reading surpassed analysts’ estimate for a surplus of $58.1 billion. On a negative note, imports declined by 0.6% on a yearly basis in the same period. Following these readings, Hong Kong’s Hang Seng Index failed to gather bullish momentum and it was last seen losing 1% on a daily basis.
The Bank of Canada (BoC) left the policy rate unchanged at 5% as expected on Wednesday. In the policy statement, the BoC noted that the economy was no longer in excess demand. USD/CAD continued to edge higher after the BoC event and was last seen trading slightly above 1.3600. Meanwhile, the barrel of West Texas Intermediate fell nearly 4% and declined below $70 for the first time since late June on Wednesday, putting additional weight on the commodity-sensitive loonie.
EUR/USD closed the sixth consecutive day in negative territory on Wednesday. Early Thursday, the pair finds it difficult to stage a rebound and trades in a tight channel slightly above 1.0750. The data from the Euro area showed that Retail Sales declined by 1.2% on a yearly basis in October.
After closing below 1.2600 on Wednesday, GBP/USD continued to stretch lower and touched its weakest level since November 24 below 1.2550. At the time of press, the pair was trading flat at around 1.2560.
Bank of Japan Governor Kazuo Ueda talked about the policy options once they move out of the ultra-loose policy on Thursday. “We could either keep the interest rate applied to reserves (financial institutions park with the central bank), or revert to a policy targeting the overnight call rate,” Ueda told Japanese parliament. “There are various options. But we have not made a decision yet on which interest rate to target once we end our negative interest rate policy,” he added. USD/JPY came under heavy bearish pressure on these comments and declined toward 146.00, touching its lowest level since early September in the process.
Despite the broad-based USD strength, Gold held its ground on Wednesday, supported by retreating US Treasury bond yields. Early Thursday, XAU/USD stays relatively quiet at around $2,030.
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