Article / 13 November 2017 at 22:32 GMT

US Wrap: Kuroda says Japan's economy no longer in deflation

FX Trade Strategist / www.Loonieviews.net
Canada
NY Focus: New York walked into a modestly firm greenback, and an empty US data calendar on Monday. EUR and GBP were the exception. Both were slightly higher.

News that General Electric (GE: NYSE) cut its dividend by 50% gave Wall Street something to focus on. GE lost 7.17%. However, GE’s bad news was isolated, and the three main indices closed up, with tiny gains.

Reuters reported Bank of Japan Governor Haruhiko Kuroda told an audience in Zurich that “this powerful monetary easing ... has been producing remarkable effects, we judge that the economy is no longer in deflation, which is generally defined as a sustained decline in prices.” USDJPY rallied from ¥113.25 to ¥113.70, supported by general US dollar strength.


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 Bank of Japan governor Haruhiko Kuroda says Japan is no longer in deflation, thanks to “powerful monetary easing" steps taken by the central bank. Photo: Shutterstock

EURUSD traded with a bid in a 1.164-1.1674 range ahead of key Eurozone data on Tuesday.
GBPUSD bounced from the overnight low triggered by rising political uncertainty in the UK. Traders seemed to conclude that with minority governments, political uncertainty is the norm. GBPUSD rose from 1.3078 to 1.3127.

The broad US dollar strength led to commodity currency bloc weakness. AUDUSD and NZDUSD extended overnight losses. The bounce in USDCAD was exacerbated by the Canadian bank holiday.

Tuesday Focus: The data pantry gets replenished, beginning with releases for China's Retail Sales and Industrial Production.

Meanwhile European traders will dine on a smorgasbord of economic data releases, including German CPI, ZEW data, UK PPI and CPI reports and Eurozone GDP, ZEW and a speech by ECB President Mario Draghi.

EURUSD traders have been looking for direction and Tuesday’s data may be the GoogleMap that gives the directions that they need. A break above 1.1750 should extend gains to 1.1880 while a break below 1.1630 will lead back to 1.1500.

Four-hour EURUSD chartsaxo












Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more

– Edited by Robert Ryan

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Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.
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