Morning Update – 20/11/15 – 08:04:15

November 20, 2015 by Arjun Lakhanpal

Morning all.. Mixed G10 FX price action overnight with most currencies pairs trading within a relatively tight range amongst a quiet final Asian session for the week. Wall St had a very quiet session closing unchanged on the day and Asia has also been quiet with the Nikkei unchanged.. The dollar squeezed lower yesterday but buying is back with the EUR trading back at 1.0700. USDJPY is weaker and oil is slightly weaker. The ECB Minutes erred on the dovish side but the market was clearly very short EUR. This supports the view that aggressive easing is coming in December. However, much like earlier Fed hawkishness, the indications that the ECB is primed for action have done little to pressure the currency. This suggests that investors have well accounted for the ECB’s likely moves and following recent shifts in positioning, markets are consolidating. Given the high intensity of EUR selling and USD buying, we would not be surprised if this phenomenon continues in the short-term. NZD continues to surprise – NZD has been the best performing currency in recent months, confounding widespread expectation that lower milk prices and USD appreciation would drag it down. . NZD was biggest gainer, up ~15bps, as it traded through its 55dma overnight, with credit card spending for the month of Oct showing a 7.8% rise y/y. AUD also remains bid considering the falls in commodities like copper and iron ore. Fed speakers Fischer and Lockhart were on the wires yesterday LDN evening; Stan Fischer re-iterated Dec for lift-off whilst Lockhart tried to reinforce gradual pace of hikes. Fed’s Fischer: No final decision on a hike yet; Fed still watching data; Fed has done all it can to prevent surprising the mkts..Relatively muted reaction in currencies to the headlines. This morning we get UK Public sector borrowing and little else. Good luck..