Forexlive Americas FX News Wrap 27 Nov: US Dollar Declines as Yields Move Lower

It was a quiet Monday in the North American session. At the start of the session,

• The EURUSD was trading within a 32-pip trading range. That was well below the 72 pip average over the last 22 trading days (around one month of trading). The pair extend the range but only by 2 pips to 34 pips.
• The GBPUSD was trading in a 53-pip trading range at the start of the North American session and remained within that 53 pip trade and range. That was well below its 92 pip average.
• The USDCHF was trading within a 34-pip trading range well below its 55-pip average. The day is ending with that same 34 pips range.
• The AUDUSD stayed within its 47-pip trading range (below its 61 pip average).

Both the USDCAD and NZDUSD did extend their ranges from the start of the North American session, but the extensions were minimal. The USDCAD high-low trading ranges only 48 pips vs a 22-day average of 79 pips. The NZDUSD range is 47 pips versus a 22-day average of 61 pips.

All of which suggests the market was not inspired much in the North American session. Overall, the USD is still ending the day as the weakest of the major currencies. The JPY is the strongest.

The USD’s weakness today was helped by lower yields Looking at the yield curve yields trended to the downside as the US session moved on. A snapshot nearly close shows:

• 2-year yield 4.890%, -6.9 basis points
• 5-year yield 4.412%, -9.0 basis points
• 10-year yield of 4.388% -9.5 basis points
• 30-year yield 4.538% -7.8 basis points

Economic data was limited to US new-home sales. However, that data piece showed weakness mirroring the existing home sales from last week.

On an annualized basis, the new-home sales units came in at 0.679m which was much less than the 0.723M estimate and well below the 0.719 million from last month (revised sharply lower from 0.759M). Admittedly, mortgage rates have come off which may lead to a bounce back next month (rates were pushing 8% over parts of the last month). However, not only did sales move lower but the supply of homes also pushed higher and prices moved lower. The supply of new homes moved up to 7.8 months from 7.2 months in September, while the median sales price fell to $409,300 which is down -17.6% from October 2022.

In the US stock market today, the major indices that started the week moving modestly lower:

• Dow industrial average fell -56.68 points or -0.16% at 35333.48
• S&P index fell -8.89 points or -0.19% at 4550.44
• NASDAQ index fell -9.84 points or -0.07% at 14241.01

Tomorrow in the North American session:

• S&P/Case Shiller Home Price Index will give another view of the US housing market at 9 AM ET.
• Conference Board consumer confidence will be released at 10 AM (101.0 versus 102.6 expected)
• Richmond Fed manufacturing index will also be released at 10 AM (1 versus 3 last month)

There is also scheduled a number of fed speakers including:

• Chicago Fed Pres. Goolsbee at 10 AM ET
• Federal Reserve Gov. Waller at 10:05 AM ET
• Federal Reserve Gov. Bauman at 10:45 AM
• Federal Reserve government bar at 1:05 PM ET

ECB central banker Lagarde will also speak at 11 AM ET, and Bank of England’s MPC member Haskel will speak at 12 PM ET adding to the speaker schedule..