Mixed Dollar amid Light News as Investors Move to Sidelines

Turnover in the capital markets is falling, and the light new stream encourages
further thinning of the holiday markets.
broad strokes, equities are lower, bond yields higher and the dollar, mixed.
The Swedish
krona, which rallied yesterday after the Riksbank tapered its bond purchases,
though refrained from cutting rates, is continuing to shine today. 
Yesterday’s 1.2% rally has been extended another 0.3%
The euro, which
had fallen to nearly $1.0350 a couple of days ago, traded near $1.0470 in
European morning.
nearly meets the measuring objective of a possible head and shoulders
pattern on the hourly bar charts.  To
lift the tone further, it must take out the $1.05 area, which does not look
particularly likely today.  
The dollar is
inside yesterday’s range against the yen, which is inside Tuesday’s range.It is
in about a 30 tick range.
  A base has been established near JPY117.40.  A move above JPY117.80 could
spur a move toward JPY118.20.   Note that Japanese markets are closed
tomorrow, and are open on Monday (when European and US markets are closed).  The Nikkei closed
fractionally lower today.  It is the first back-to-back lower close this
month.  However, a minor gain was still
secured on the week, which extends that advancing streak to seventh
consecutive week and nine of the past 10. Foreign investors have been net
buyers of Japanese equities every week but one here in Q4.  
continues to trade heavily. 
 For the seventh consecutive session,
it is recording a lower higher.  It is moving lower for the fourth
consecutive session and eight of the 10
sessions.  It has weakened in 11 of the past 13 sessions.  Still sterling has built
a little base in front of $1.23. It looks capped in the $1.2380-$1.2400 area.
The Australian
and Canadian dollars are the heaviest of the majors today. 
 The Aussie is off 0.5% near $0.7200.  It slipped
below there for the first time since the end of May.  The May low was set near $0.7145, which is the next
important target.  Nevertheless, Australian equities joined the Shanghai
Composite as the only Asia-Pacific bourse that is closed higher on the session.
 Recall that in the futures market;
speculators were only net long the Australian dollar. Rising global
rates take some shine off the Aussie.
The US dollar
is also taking a leg higher against the Canadian dollar. 
 After being stymied in the CAD1.3420-CAD1.3430 area,
the US dollar pushed to CAD1.3460 in the European morning.  It the greenback
overcomes the CAD1.3480, there is potential to retest the mid-November high
near CAD1.3600.  With oil moving sideways, interest rate differentials may
exert themselves again.  
The US has a
full slate of data out today, but with few needing to trade now, look for a
muted response. 
 Of the highlights, we note that Q3 GDP may be
tweaked higher, but Q4 estimates may be
shaved after today’s durable goods and personal consumption reports.
 The headline durable goods orders are expected to be poor, but the
details more supportive.  After reasonably firm consumption in Q3 (~2.8%),
a slower pace has emerged in Q4, and this
warns of downside risks to the 0.3% gain the Bloomberg median forecasts.  

Canada reports
November CPI figures. 
 Also remember that it will introduce
new measures to replace its old core rate.  The takeaway is that price
pressures have eased in Canada, but the central bank is still optimistic that
the recovery in the US will spill over
and help lift the Canadian economy. Separately, Canada reports October retail
sales.  A 0.7% gain is expected, but
may be closer to 0.3% when autos are excluded.  


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