Stark improvement in the US trade balance as deficit falls to $49.3bln in Nov
Another reason to look favourably upon the USD as the US trade deficit in Nov contracted from $55.7bln to $49.3bln. This will be seen as a strong sign that US trade policy is having an effect and is likely to help underpin any bouts of USD weakness over the medium term. However, the data is 3 months old, so we do not expect there to be too much of a reaction in the greenback, though North American traders may have other ideas later on.
Against this, Q4 non-farm productivity was flat on the quarter vs expectations of a 1.7% rise - Q3 was revised up to 2.3%. The rest of the data schedule has been delayed as a result of the government shutdown - which may well resume next week if president Trump digs in on his demands on border wall funding.
So far today we have seen minimal change in the key USD pairings, but as is now a familiar trait, we could see activity pick up after London hours when liquidity is not so tight and markets seem to fee up.
EUR/USD has been frustratingly close fought, with support below 1.1400 containing the downturn to 1.1380 or so. A move below here will bring us closer to yet more demand in the 1.1350-60 area and through here we are looking at yet another potential move on 1.1300.
USD/JPY is again pushing higher despite the rejection of 110.00 yesterday, and this is largely off USD buying seen today as well as a stable equity market where S&P futures are currently flat on the day.