Good morning, the dollar was trading around one-week highs against the euro and yen today as U.S. economic data in the previous session reinforced the view that the Federal Reserve will keep interest rates steady. The dollar initially slipped after underlying U.S. October consumer prices rose by less than expected, but quickly reversed these losses after a regional Fed survey showed a rebound in factory activity. All in all, investors gained confidence that the world's largest economy is headed for a soft landing and the Fed will maintain the U.S. currency's yield advantage with its 5.25 percent rate. The yen slipped after Bank of Japan Governor Toshihiko Fukui failed to give a clearer indication about whether rates could rise as soon as December to 0.5 percent from 0.25 percent following strong third-quarter growth data earlier in the week. The yen was also knocked briefly later after comments from the United Arab Emirates central bank governor that he did not see the yen as attractive for FX reserve diversification.
The Philadelphia Fed's survey released on Thursday showed Mid-Atlantic manufacturers posted slight growth in November after a two-month contraction. The National Association of Home Builders index of activity rose to 33 in November, up for a second month from September's 15-year low of 30.
I see an opportunity in the USD/CAD, a trend is developing in the daily charts and this also is aligned with fundamentals, the BOC is going to be pressured to cut interest rates very soon, causing the CAD to slip.
Have a nice weekend!
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