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Greenback Extends Post-CPI Pullback

FOREX
  • The greenback is extending the post-CPI pullback, falling against all others in G10. The USD Index is now comfortably through the 100-dma, potentially opening another leg lower for the dollar. 107.037 Fib retracement marks first support, and a break through puts the dollar at the weakest level since mid-August.
  • This has put USD/JPY through the September intervention lows and below Y140.00 for the first time since early September. This opens 138.64 next, a Fibonacci retracement.
  • USD/JPY's sharp downtick puts JPY top of the G10 pile, with SEK and AUD similarly outperforming. AUD/USD prints the best level since mid-September, with the 100-dma of 0.6703 the next upside level.
  • Focus turns to the prelim Uni. of Michigan release for November, with 1-yr inflation expectations seen ticking higher to 5.1% from 5.0%. The central bank speaker slate picks up, with ECB's Panetta, de Guindos, Lane, de Cos, Centeno and Nagel on the docket as well as BoE's Haskel and Tenreyro.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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