The US dollar rose to a two-week high on Wednesday, while the euro was broadly weak as markets raised bets that the European Central Bank (ECB) will cut interest rates as early as March. The dollar rose 0.14% from the previous day to 104.100 and is close to 103.92.
Investors are now betting that there is about an 85 percent chance that the ECB will cut interest rates at its March meeting, and that by the end of next year interest rates are estimated to be about 150 basis points lower. Influential ECB decision-maker Isabel Schnabel told Reuters on Tuesday that further rates could be taken off the table if there is a “significant” drop in inflation.
EURUSD fell 0.21% to $1.0773 after hitting a three-week low.
Data released yesterday added to that belief, as data from payroll processor ADP showed that US private employers added just 103,000 jobs last month, down from a revised 106,000 in October. Economists had predicted an increase of 130,000 jobs.
Crude oil fell to a multi-week low and hit its lowest level since June, as a larger-than-expected increase in US gasoline inventories raised concerns about demand for the fuel. Concerns about China and the health of the economy also weighed on prices a day after Moody’s downgraded China’s outlook and A1 rating from stable to negative.
U.S. gasoline inventories rose by 5.4 million barrels last week, according to the Energy Information Administration, more than five times the 1 million barrel analysts expected. [EIA/S] .
Crude inventories fell by 4.6 million barrels, beating analysts’ expectations of 1.4 million barrels.
Gold rose as government bonds eased and steadied after a quick retreat from a record high hit earlier this week. Silver and copper retreated as markets balanced the latest US data against mixed economic indications from China.
MCX gold futures were up 0.41% at 62769. Silver was down 0.65% at 75915. Copper fell 0.65% to 708.45. Crude oil fell to 5823, down 4.23%. Natural gas down 5.96% to 214.4.
Economic data and events scheduled today.
China
Tentative – Trade Balance. Data is foreseen at 392B from previous 405B.
Tentative – USD-Denominated Trade Balance. Data is foreseen at 55.0B from previous 56.5B.
Above data could have a negative impact on the Yuan.
Eurozone
At 12.30pm- German Industrial Production m/m. Data is foreseen at 0.1%. Previous was at -1.4%.
At 1.15pm – French Trade Balance. Data is foreseen at -8.5B from previous -8.9B.
At 2.30pm – Italian Industrial Production m/m. Data is foreseen at -0.4% from previous 0.0%.
At 3.30pm-
Final Employment Change q/q. Data is foreseen at 0.3% from previous 0.3%.
Italian Retail Sales m/m. Data is foreseen at -0.1% from previous -0.3%.
Revised GDP q/q. Data is foreseen at -0.1% from previous -0.1%.
All day – Eurogroup Meetings
Above data could have a volatile impact on the Eur.
UK
At 12.30pm – Halifax HPI m/m. Data is foreseen at 0.3% from previous 1.1%.
Above data could have a Neutral impact on the pound.
Canada
At 7.00pm- Building Permits m/m. Data is foreseen at 1.1% from previous -6.5%.
At 10.45pm – Gov Council Member Gravelle Speaks.
Above data could have a volatile impact on the Canadian dollar.
U.S.–
At 7.00pm- Unemployment Claims. Data is foreseen at 221k from previous 218k.
At 8.30pm- Final Wholesale Inventories m/m. Data is foreseen at -0.2% from previous -0.2%.
At 9.00pm- Natural Gas Storage. Foreseen at -110B previous was at 10B.
Above data could have a volatile impact on the dollar.
Commodity Samachar
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