November 5th, 2015
Yesterday, the NZD was the weakest currency. Today it is the strongest. The weakest currency is the GBP on the BOE's worries about inflation (lack thereof) and growth and see an even flatter path for rates. The BOE also pushed back the rate hike assumption to Q1 2017 from Q2 2016.
The USD is up the most against the GBP with the GBPUSD tumbling below the 1.5300 level. Against the EUR the greenback is marginally higher after yesterday's sharp move lower. The USDJPY is has moved higher again today and moved above the 100 day MA at 121.76. The high tested the 122.02 next target (see chart below).
The volatility outside the GBP pairs, is once again down (see ranges vs avg ranges in the chart below). The ranges for most pairs are below the 22-day averages.
We do have US employment claims (est 263K), non farm productivity (est +0.1%), unit labor costs (+2.2% est) out today (along with Ivey PMI in Canada) to kick start the other pairs. Fed's Dudley, Fischer, and Lockhart are also scheduled to speak. But the main event in the US will be the employment report tomorrow (+180K).
My wonder....with the BOE turning to the dovish side (they were thought to be more of a "Fed rate hike ally"), can the Fed go at it all alone? The warning from Yellen on global growth yesterday and the impact of a higher dollar on inflation could be more of a problem for the Fed policy makers. Not having someone to follow along would make the dollar even more of a king among the rest.
