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FOREX: USD Eases Off Post-Election Highs

FOREX
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  • Following the acute post-election rally on Wednesday, the USD is easing off highs into the Thursday crossover, slipping against all others in G10. As a result, EURUSD is back above 1.0750 and USD/JPY has slipped back toward the Y154.00 handle.
  • Should the Fed decision later today be absorbed smoothly enough, focus will remain on the sustainability of near-term USD/JPY given the proximity in price to levels at which the BoJ intervened to buy the currency during periods of financial instability earlier this year. Similarly, we see 155.27, a Fibonacci projection, as the next upside target, with initial firm support at 151.29, the 20-day EMA.
  • NOK is leading the G10 bounce following the unchanged Norges Bank rate decision this morning, at which the Bank gave no firm indication that their hawkish stance on policy would ease in the immediate future. Conversely, the Riksbank cut rates by 50bps which, while alongside expectations, helped NOK/SEK print a new multi-month high today.
  • The Bank of England rate decison set for 1200GMT/0700ET is expected to see a further 25bps rate cut, with much market focus on the extent to which the BoE are baking in risks from the UK Budget into their forecast for the coming years.
  • US data picks back up today with the weekly jobless claims release, with the Fed rate decision set to follow. The FOMC are expected to back a 25bps rate cut at today's meeting, and are unlikely to comment directly on this week's election results - although will certainly be questioned on them at the press conference with Fed Chair Powell. 
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  • Following the acute post-election rally on Wednesday, the USD is easing off highs into the Thursday crossover, slipping against all others in G10. As a result, EURUSD is back above 1.0750 and USD/JPY has slipped back toward the Y154.00 handle.
  • Should the Fed decision later today be absorbed smoothly enough, focus will remain on the sustainability of near-term USD/JPY given the proximity in price to levels at which the BoJ intervened to buy the currency during periods of financial instability earlier this year. Similarly, we see 155.27, a Fibonacci projection, as the next upside target, with initial firm support at 151.29, the 20-day EMA.
  • NOK is leading the G10 bounce following the unchanged Norges Bank rate decision this morning, at which the Bank gave no firm indication that their hawkish stance on policy would ease in the immediate future. Conversely, the Riksbank cut rates by 50bps which, while alongside expectations, helped NOK/SEK print a new multi-month high today.
  • The Bank of England rate decison set for 1200GMT/0700ET is expected to see a further 25bps rate cut, with much market focus on the extent to which the BoE are baking in risks from the UK Budget into their forecast for the coming years.
  • US data picks back up today with the weekly jobless claims release, with the Fed rate decision set to follow. The FOMC are expected to back a 25bps rate cut at today's meeting, and are unlikely to comment directly on this week's election results - although will certainly be questioned on them at the press conference with Fed Chair Powell.