FX Highlights

  • The USD traded at a new 14 month low as global equity markets trade higher with US equities supported by report of better than expected earnings at Intel, the Intel earnings report is seen as confirmation that the global economy is recovering, USD was also pressured by dovish comments from the Fed's Kohn which confirm that US interest rates will remain low for extended period, JPY supported by comments from Japan's MOF downplaying the need for intervention solely based on JPY strength and BOJ upgrades their outlook for Japan's economy, EUR supported by better than expected EU industrial production, GBP supported by report of better than expected UK employment data as jobless claims post a small rise since May of 2008, commodity currencies firming in reaction to rising equities stronger commodity prices and better than expected export data from China
  • Focus turns to today's release of US retail sales, business inventories, import prices and FOMC minutes
  • BOJ holds rate policy steady as expected, upgrades its view on Japans economy, no comment on corporate bond buying program, Japan's Finance Minister Fujii cautions that Japans economic situation may be weaker than BOJ view , MOF's Vice Finance Minister Minezaki says Japan should not intervene in FX market just because of JPY strength, rapid FX moves undesirable, Japan's September corporate good prices rise 0.1%, JPY higher
  • Australia's October consumer confidence index rises 1.7%, AUD higher
  • China's exports post smaller decline fueling recovery hope and risk appetite
  • EU August industrial output rises 0.9%, ECB's Qauden says the economic recovery looks fragile, EUR higher
  • UK unemployment rate at 7.9%, jobless rise by 88k, claimant count at 20,800k, GBP higher
  • China's reserves rise to 2.27 trln in Q3
  • Fed's Kohn says the US recovery will be more gradual than V shaped, deflation a bigger threat than inflation, housing and consumer spending sow improvement, unemployment could top 10% in 2010, his comments may reduce speculation of an early Fed rate hike
  • Russia's finance minister says USD role as reserve currency to decline
  • Investor Business Daily Economic Index slipped to negative territory at 48.7 in October from 52.5 in October
  • White House economic advisor Summers says slack in the economy and high household debt are a challenges to sustainability of growth going forward
  • Canada's PM Harper said the rapid rise of CAD is a concern and a risk to the recovery, CAD near 14 month high
  • US equity markets set to open sharply higher, European equities 2% higher, Nikkei closed 16 points lower higher

Upcoming Events

  • US - Wednesday, September retail sales will be released expected to fall by 2.1% and rise 0.2% ex-autos along with August business inventories expected at -0.8% compared to -1% last month and September import prices expected at 0.25 compared to 2% last month and the FOMC minutes for the September 22/23 policy meeting
  • CAN - Wednesday, no major Canadian economic data is due for release today