Easy Pips Intraday Currency Trader Report
China’s decision to elevate the banking reserve ratio by fifty basis points established an early risk-averse tone for markets yet the doubts did not last and markets were whippy and directionless through the rest of the day. The pound sterling and New Zealand dollar were the top performers whilst the Swiss franc and Japanese yen lagged.
Sentiment improved following a report expressing that U.S. initial jobless claims fell to the lowest since July. First-time claims for jobless benefits fell to 435K from 450K in the week closing Nov. 6. The U.S. dollar climbed to the highest in a month next to the yen following the report but later gave back a significant portion of its gains.
A U.S. bond auction sent ripples through the market. The sale of $16 billion in 30-year bonds was significantly weaker than predicted. The market was looking forward to 4.275% however the issue sold at 4.320%. The nearly 5 basis point miss is one of the worst, if not the worst in the previous five years in the long bond. A round of unpredictability struck the market right after the auction as market participants used the bond weakness as a buying opportunity. What had been initially a dollar positive, switched into a dollar negative and assisted the euro rally of more than 100 basis points from its lows.
Worry regarding Ireland has been hurting the euro and Irish borrowing costs climbed for the 12th sequential day. At one point during the session, Irish 10-year yields climbed by more than sixty basis points. That pushed the EUR/USD to a one-month low nonetheless discount buying of Irish bonds paying 9% per year helped reverse the trade as did comforting comments from Irish central bank Governor Patrick Honohan.
Please note that November 11 is a holiday in North America, the UK and areas of Europe so the data calendar is light and market liquidity will be thin. Anticipate to see choppy trading following possibly large moves in the data-heavy Asia-Pacific session. Content provided by AroundFX.com.
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