US bright data helped USD keep strength

December 12, 2014

When market was expecting for more space for majors to bounce against the Dollar, upbeat retail sales and unemployment claims data boosted the USD and US stocks market last night, preventing further loss of the dollar. Dollar reversed most loss against Yen and Euro, and left dojis on the daily charts of GBPUSD, NZDUSD and gold.

The retails sales expanded 0.7%. It is higher than the expected 0.4%, and is the highest in eight months, as the wage growth accelerated and oil fell. The weekly jobless claim was 294,000, slightly better than the forecast as well. The data confirmed the solid recovery of US economy and is certainly a bullish aspect for US dollar.

Dollar Yen bounced from the 118 support to current 119 level and retook most of the loss during Wednesday. As we can see on the daily chart, the pair was trading around the 118 level in the second half of November. Yesterday’s rebound confirmed the support and implied that the rising may restart.

Australian Dollar performed weak in recent trading days. More bad news came from Australia’s biggest trading partner. The surprising drop of Chinese November imports weighed on Aussie Dollar. The RBA governor Stevens took the chance to make a more dovish statement last night. He said the exchange rate should be at 0.75, which is certainly better than 0.85. Aussie fell over 80 pips right after the statement and refreshed at a recent low to 0.8214. The bearish trend line remains in the daily chart.

Back to the stock markets, the Shanghai Composite lost 0.49% to 2926 yesterday as the authority warned on leverage trading. ASX 200 lost 0.53% to 5231. The Nikkei Stock Average was down 0.89%. The European markets were still suppressed by the situation of Greek domestic political situation. The UK FTSE lost 0.59%, the German DAX added 0.64% and the French CAC Index was down 0.1%. US market mostly rebounded. The S&P 500 closed 0.45% higher to 2035. The Dow rose 0.36% to 17596, and the Nasdaq Composite Index gained 0.52% to 4704.

On the data front, Chinese GDP aggregate data will be released at 16:30 AEDST. At midnight, traders will watch US PPI and Consumer Sentiment.

Have a great trading day!

Anthony

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