Forex Today: Cautious optimism prevails amid China woes, partial US market holiday

Here is what you need to know on Monday, November 11:

Markets remain cautiously optimistic at the start of a new week, following a record-setting rally on Wall Street last week. Disappointment with China’s 10 trillion yuan ($1.4 trillion) fiscal stimulus package and soft inflation data raise concerns over economic prospects, sagging investors’ confidence.

China’s CPI rose 0.3% last month from a year earlier, slowing from September's 0.4% rise and the lowest since June, data from the National Bureau of Statistics (NBS) showed on Saturday, missing a 0.4% increase estimated.

Meanwhile, the ‘Trump trades’ optimism seems to have returned, lifting the US equity futures and the benchmark 10-year Treasury bond yields. However, the US Dollar (USD) extends its upside consolidative phase against its major rivals, as traders refrain from placing fresh bullish bets on the Greenback ahead of Wednesday’s US Consumer Price Index (CPI) data release.

Looking ahead, it is a relatively quiet economic calendar In Europe while US traders observe a partial market holiday on Veterans Day. US bond markets are closed but stock markets will remain open this Monday.

Across the G10 FX board, the Japanese Yen (JPY) is the weakest so far, undermined by the uncertainty over the Bank of Japan’s (BoJ) interest rate hike timing. The BoJ published the Summary of Opinions from its October monetary policy meeting, which showed that “board members advise caution and taking time in raising rates.” USD/JPY holds sizeable gains to trade at around 153.50 following the BoJ’s Summary of Opinions.

AUD/USD attempted a tepid recovery, which remains capped at 0.6600 amid China concerns. At the same time, NZD/USD defends bids near 0.5975 after New Zealand's two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, increased slightly to 2.12% in Q4 from 2.03% seen in Q3 2024 of this year.

EUR/USD lost its upside traction, returning to the red toward 1.0700 in the last hours. The Euro received a fresh lift in early Asia from European Central  Bank (ECB) Governing Council member Robert Holzmann’s comments. Holzmann said that a December interest rate cut is a possibility but by no means guaranteed.

GBP/USD holds lower ground after testing the 1.2900 round figure, as traders stay unnerved heading toward Tuesday’s UK labor market data,

USD/CAD gyrates at around 1.3911 amid light trading due to Remembrance Day in Canada on Monday. WTI Oil licks its wounds near the $70 mark, reeling from China’s stimulus disappointment and waning storm threat in the US.

Gold remains depressed below $2,700, lacking a clear impetus, as markets digest the past week’s Donald Trump’s US presidential victory and the Federal Reserve (Fed) rate cut.