FOREX: Greenback Weakness Extends, CHF Continues to Outperform Post-SNB
Dec-11 19:17
- Post-Fed dollar weakness had been offset by Oracle-related equity weakness initially on Thursday, however, as the major equity benchmarks steadily recovered throughout the session, the USD index extended to fresh pullback lows. This dynamic was exacerbated by the higher-than-expected jobless claims data, boosting concerns over the US labour market. This has prompted the USD index to extend its three-week selloff to around 2.25%.
- The broad greenback weakness translated to roughly 0.5% rallies for the likes of EUR and JPY, while AUD was a notable underperformer following the weaker-than-expected jobs report during APAC hours.
- For EURUSD, spot grinded steadily higher above the 1.17 handle to narrow the gap significantly to 1.1779, the Oct 01 high. Despite the initial Aussie pressure, AUDUSD has done a good job in rallying back to within striking range of the week’s highs at 0.6686, highlighting the resilient technical profile. 0.6717 remains a key resistance.
- Elsewhere, the Swiss Franc continues to outperform, rising a further 0.7% against the dollar today amid the SNB’s decision to hold rates. Despite downwardly revised inflation forecasts, the SNB’s conviction for a medium-term CPI uptick remains firm. USDCHF weakness picked up momentum through two lows at 0.7992, signalling scope for a move towards 0.7873 and year’s lows at 0.7829.
- In emerging markets, USDMXN continues to erode last year’s post-election rally, sinking to the lowest levels seen since July 2024. The pair now resides just below the psychological 18.00 handle, and technical signals point to a growing likelihood of a move towards 17.4491, as we approach next week’s Banxico meeting.
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US: Trump Suffering From Negative Perceptions Of Inflation
Nov-11 19:05
Semafor reports that Americans “appear increasingly convinced the economy is moving in the wrong direction”, despite President Donald Trump’s “insistence to the contrary.”
- Semafor notes, “Even as inflation has largely remained in check and stocks have surged, the White House finds itself combatting a public narrative that blames the president for rising costs and a cooling labor market. Democrats across the country who ran affordability-focused campaigns trounced Republicans in elections last week.”
- An EY-Parthenon economist said, per the report, that the economy is “resilient on the surface,” but increasingly dependent on three “A-pillars, affluent consumers, artificial intelligence-fueled investment and asset price gains.”
- Conservatives, too, are growing frustrated with Trump’s approach, adds Semafor; The Federalist’s CEO said Trump should “ditch the foreign policy... and focus all his attention on the domestic economy.”
- With the US government set to reopen as soon as tomorrow, there will be focus on Trump's approval rating, which sank to a new low over the past two weeks. Silver Bulletin notes that Trump's approval is "down to -13.0. That’s the lowest it’s been during his second term. The share of Americans who strongly disapprove of Trump also hit a second term high of 45 percent yesterday."
Figure 1: US Adults on how Trump Politics have Affected the Economy
Source: Semafor, Pew Research Center
US TSYS: Trading Sideways
Nov-11 19:02
- Treasuries hold firmer - narrow range since marking session high late morning. Currently, the Dec'25 10Y contract trades +10.5 at 113-00.5 vs. 113-01.5 high - just below resistance at 113-02, the Nov 5 and 7 high. Clearance of this level would highlight a potential bullish reversal.
- Otherwise, a short-term bear theme in Treasuries remains in place. Attention is on a reversal trigger at 112-06, the Sep 25 low, and the 100-DMA, at 112-08. A clear break of these price points would expose a trendline support at 112-02. The trendline is drawn from the May 22 low.
- USD also holding narrow range since marking session low in the first half, Bbg $ index BBDXY -1.38 at 1,217.33 vs. 1,216.52 low.
- The DJIA, however, continues to climb: +5011.60 at 47,880.23 (+1.09%), outpacing SPX eminis (+0.28%) while the Nasdaq holds mildly weaker (-0.1%).
- Look ahead: Wednesday data limited to MBA Mortgage Applications at 0700ET, Tsy auctions: $69B 17w bill and 42B 10Y Note (91282CPJ4). Focus on multiple Fed speakers through the session: Williams, Paulson, Waller, Bostic, Miran and Collins.
EURGBP TECHS: Bullish Trend Sequence
Nov-11 19:00
- RES 4: 0.8865 1.764 proj of the Sep 15 - 25 - Oct 8 price swing
- RES 3: 0.8848 1.618 proj of the Sep 15 - 25 - Oct 8 price swing
- RES 2: 0.8835 High May 3 2023
- RES 1: 0.8830 High Nov 5
- PRICE: 0.8801 @ 16:27 GMT Nov 11
- SUP 1: 0.8763 Low Nov 3
- SUP 2: 0.8756 20-day EMA
- SUP 3: 0.8719 50-day EMA
- SUP 4: 0.8656 Low Oct 8 and a key support
The trend condition in EURGBP remains bullish and recent gains reinforce current conditions. The move higher has confirmed a resumption of the uptrend and maintains a bullish price sequence of higher highs and higher lows. Sights are on 0.8835, the May 3 2023 high. Initial support lies at 0.8763, the Nov 3 low and just above the 20-day EMA, at 0.8756. Note that the trend is overbought, a pullback would be considered corrective.
