US Dollar Up On Recently Improving Data and Less Dovish Fed | IFCM India
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US Dollar Up On Recently Improving Data and Less Dovish Fed - 1.11.2013

The US dollar has been strengthening against its major counterparties starting from Wednesday less dovish Fed .Yesterday was also supported by slightly lower US Jobless Claims for the previous week as well as on Chicago PMI for October jumping to 65.9 up from previous month at 55.7 and surprisingly higher than estimate at 55.1. The US dollar index climbed from Thursday support at 79.66 to Friday cap at 80.38, making in the last week the biggest rally of the last two months. We would expect a downside correction in the intraday before upside continues as most of H4 oscillators are overbought.


US Dollar Index
US Dollar Index



On Europe’s side, the common currency was under selling pressure against the greenback in the last 24 hours falling from 1.3714 to 1.3538 after a series of sluggish economic data releases for the Euro-zone. Initial release showed that German Retail Sales unexpectedly dropped in September, the Flash CPI fell for October in annual terms to 0.7% increase compared to previous reading at 1.1%, allowing for ECB to rethink about reducing rates, lastly EZ Unemployment Rate jumped to 12.2% in September up from expected at 12.0%. The EURUSD is likely to correct in the intraday as indicators are overbought and is likely to enter next week with downside mood.


Chinese Manufacturing PMI surprisingly jumped to 18-month new high at 51.4 supporting Crude Oil which recovered to 96.71. In addition, risk sentiment improved as the second largest economy manufacturing sector expanded more than estimated, with Australian currency benefiting on that. The AUDUSD surged in recent trading from 0.9443 to 0.9488 despite that US dollar was on the upside as well, we wouldn’t expect Aussie’s rise to persist.


CNY Manufacturing PMI


Looking ahead, there are not many economic events in today’s session. We would watch British Manufacturing PMI and US ISM Manufacturing PMI. Concerning equities we are only interested for Chevron earnings release.
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