Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie, CNY lead losses
FX markets saw mixed trading on Friday as strong US consumer confidence data competed with China growth concerns, which reinforced the US dollar index’s recent post-election strength.
USD/CNH pushed back towards 7.20 after limited policy details from China’s NPC press conference, with markets also potentially pricing risks from Trump 2.0 trade policies.
In Europe, major indices closed in red with EUR/USD testing 1.07 levels, as the region’s China exposure weighed on sentiment.
November UMich survey expectations jumped to 78.5 – highest in nearly three years, highlighting US economic resilience.
CAD underperformed after soft jobs data (+14k vs +27k expected) reinforced the dovish BoC narrative.
We expect markets to focus on US economic data and potential US-China trade developments, with mid-December CEWC meeting potentially offering more policy clarity from China.
US inflation and retail sales key this week
FX markets will be driven by key US economic releases this week with critical inflation and retail sales data that could influence the Federal Reserve’s policy outlook.
The October US CPI report, released 00:30am AEDT Thursday, will be closely watched after recent Fed 25bps rate cut.
US retail sales data released on 00:30am AEDT Saturday, will provide insight into consumer spending, with forecasts pointing to a 0.3% rise in October.
In other key data, Australia’s October jobs report (11:30am AEDT Thursday) could influence RBA policy expectations.
China’s monthly activity indicators are due Friday (1:00pm AEDT) with retail sales expected to rise 3.8% and industrial production forecast to increase 5.5%. Japan’s preliminary Q3 GDP reading will also be released 10:50am AEDT Friday.
Soft employment data weighs on Loonie
Although modest, Canada’s employment statistics wasn’t terrible. In October, Canada’s net employment growth was 14.5k, less than the 27.2k forecast and the 46.7k in September.
The unemployment rate, meanwhile, remained at 6.5%, below the predicted 6.6%. Since it is unclear if the BoC would continue to cut by 50 bps in the wake of this announcement.
Last week, USD/CAD attempted to reach 1.40 but eventually failed as this key level held.
Euro, Japanese yen end weakest after US election
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 11 – 16 November
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
