Dollar Climbs To New Multi-day Highs Against European Majors
Thursday during early deals, the US dollar climbed to new multi-day highs against the European majors as a slide in most Asian stocks prompted investors to seek the safety of the world’s most liquid currency. Apart from dollar, the other safe-haven status currency namely yen also advanced against its major counterparts.
Most of the stock markets across the Asia pacific region fell today. Japan’s Nikkei 225 Index dropped 67.2 points, or 0.7 percent, to 9,804.49, while Hong Kong’s Hang declined 229.64, or 1 percent, to 22,397.57. South Korea’s Kospi slid 1.4 percent to 1,572.73. In mainland China, Shanghai Composite index reversed an early gain to dip 0.1 percent at 3,173.2.
European markets opened narrowly mixed, with Britain’s FTSE up 0.3 percent to 5,281.18. Germany’s DAX was unchanged at 5,668.470, while France’s CAC 40 traded flat at 3,812.49.
From U.S., the Labor Department is due to release its customary jobless claims report for the week ended November 7th at 8:30 am ET. Economists had been expecting jobless claims to edge down to 522,000 from the 530,000 originally reported for the previous week.
At 10:30 am ET, the Energy Information Administration is scheduled to release its weekly petroleum inventory report for the week ended November 6th at. The report is released a day delayed due to the government holiday on Wednesday.
The Treasury Budget, a monthly account of the surplus or deficit of the federal government is due to be released at 2 pm ET. The budget is considered as an indicator of budgetary trends and the thrust of fiscal policy. Economists estimate a deficit of $150 billion for October.
The dollar strengthened in early dealing versus the euro and climbed to a 3-day high of 1.4928 by about 4:15 am ET Thursday. If the dollar rises further, 1.481 is seen as the next likely target level. The euro-dollar pair closed Wednesday’s deals at 1.4988.
Against the currency of Switzerland, the US dollar spiked up during Thursday’s early trading. The dollar-franc pair edged up to a 3-day high of 1.0125 by about 4:15 am ET, compared to 1.0081 hit late yesterday in New York. If the pair climbs further, 1.020 is seen as the next upside target level.
The dollar rallied to a 1-week high of 1.6518 against the pound during Thursday’s early trading, compared to 1.6577 hit late Wednesday in New York. On the upside, the next likely target for the US dollar is seen around the 1.640 level.
But the dollar weakened versus the yen, as the Japanese currency rallied across the board. The dollar dropped to 89.66 against the yen, compared to 89.86 hit late Wednesday in New York. If the dollar moves down further, it may test support around the 89.3 level.
The yen climbed against other major currencies as stock market declines prompted investors to flock to safe haven assets.
Earlier during Asian deals, the Bank of Japan said that domestic corporate goods prices were down 6.7 percent on year in October, compared to forecasts for a 6.0 percent annual decline following the 7.9 percent contraction in September.
On a monthly basis, prices fell 0.7 percent versus expectations for a 0.1 percent decline. Prices had risen 0.1 percent on month in September.
During early deals on Thursday, the yen strengthened to an 8-day high of 148.29 against the British pound. If the yen climbs further, it may likely target the 146.4 level. The pound-yen pair closed Wednesday’s deals at 148.95.
Against the currencies of Europe and Switzerland, the yen climbed to 133.95 and 88.68 by about 4:15 am ET. This may be compared to Wednesday’s New York session closing values of 134.67 and 89.18, respectively. The next upside target level for the yen is seen at 88.21 against the franc and 132.5 against the euro.
The Eurostat said in a report that Eurozone industrial production dropped 12.9% year-on-year in September, compared to the 15.1% fall in the previous month, revised from a 15.4% fall estimated initially. Economists expected a decline of 14.1%.
On a monthly basis, industrial production increased 0.3% in September, slower than the 1.2% growth in the preceding month, revised from a 0.9% rise estimated earlier. Economists were looking for an increase of 0.5%.
