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- Reverse of JPY and CNH underperformance will add to USD headwinds – Scotiabank
Reverse of JPY and CNH underperformance will add to USD headwinds – Scotiabank
The USD is narrowly mixed against the major currencies in calm trade. Economists at Scotiabank analyze Greenback’s outlook.
Soft data will maintain pressure on US term yields
Asian FX has outperformed on the session, with the JPY taking advantage of lower US yields to test the low 148 area. The CNH continues to consolidate close to its 200-DMA against the USD (7.1370) after a solid rebound in November so far. Trends in both the JPY and CNH warrant attention, both have underperformed this year so far and both are shaping up to perhaps reverse some of that underperformance which will add to USD headwinds generally.
We get (a lot more) US housing data today as well as the November reading of the Conference Board’s Consumer Confidence measure. Markets are expecting some softening in the November data. High interest rates and signs of some slackening in the labour market are impediments for confidence and support the outlook for a fourth consecutive decline in the index. A 101 result would be the lowest since July 2022. Soft data will maintain pressure on US term yields.
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