USD The dollar rebounded yesterday but overall did not move much. Q3 GDP revised up from 1.6% to 1.8% which lifted up the USD immediately. However, the residential investment fell 18% which was the biggest drop since 1991. Besides, the Core PCE index revised down from 2.3% to 2.2% which showed that the US inflation would be moderate and fuelled the speculation on the rate cut next year Q1. Later the New home sales only printed at 100.4k which fell 25.4% at the annual rate and fell 3.5% from the previous month. The data indicated that the US housing market was slowing and would be have an negative impact on US economy.
GBP GBP/USD rose to 1.9540 yesterday and fell back to 1.9450 level. Yesterday the Oct M4 money supply growth final rose 14.1% at the annual which might bring up the medium term price level upside risk. Earlier, the house price index continues to rise up which I expect that the BoE would be likely to raise rate again next year Q1. GBP/CAD rose to 2.21 level and GBP/JPY rose to 227, GBP/CHF also rose to 2.3550 which supported the Pound. GBP/USD support is at 1.9300 and resistance is at 1.9550.
CAD CAD weakened yesterday and USD/CAD rose to 1.14 level. Canada Oct commodity price index fell 2.8%. The raw material price with the commodities accounted for 54% of the export and 12% of the GDP. Later the Q3 Trade surplus widened to 5.1billion which limited the downside for the CAD. The market believes that the soft US economy would hurt the export demand for the Canada goods and services. I expect the Cad interest rate hit the peak and next year would be likely to cut the rate which pressured the CAD. EUR/CAD rose to 1.50 level and the GBP/CAD rose to 2.21. Technically, USD/CAD will consolidate between 1.1280 – 1.1450.
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