FOREX: US Dollar Rebounds In Asia, S&P Futures Hint More Gains Ahead

By Ilya Spivak, Currency Strategist

Talking Points
  • US Dollar, Yen Correct Higher vs. Risk-Linked Currencies in Asian Trade
  • Japanese Industrial Production and Inflation Disappoint, Jobless Rate Falls
  • S&P 500 Futures Hint Stocks-Linked Currencies to Trim Gains into Weekend
  • US Personal Income and Saving, Consumer Confidence Headline Calendar

The US Dollar and Japanese Yen corrected higher against their majorcounterparts overnight as markets digested aggressive selling ofthe two safe-haven currencies over the preceding 24 hours.The Australian and NewZealand Dollars bore the brunt of selling, down as much as 0.7and 0.6 percent against their US namesake, having added 3.2 and 2.7percent respectively yesterday as an encouraging outcome tothe EU debt crisis summit and a supportive US GDP report stoked risk appetite and bid up thesentiment-linked currencies.

Japanese economicdata returned mixed results. The Jobless Rate edged downward to 4.1 percent in September, thelowest in nearly three years, but IndustrialProduction slumped 4 percent and Consumer PriceIndex figures showed the annual inflation rateunexpectedly printed flat over the same period. The latter outcomesseem to at least in part reflect the impact of a stronger Yen on the export sector and relative price levels.The currency tapped a decade high this month and now trades up 4.5percent since the beginning of the year.

Looking ahead, S&P 500 stockindex futures are pointing lower, down as much as 0.5 percentin Asia, hinting the greenback is likely to extend its rebound amida deeper downward correction in risk-correlated currencies. TheEuropean economic calendar is lackluster, with traders lookingahead to the US data docket. Personal Income andSpending figures are on tap, with expectations callingfor both to improve in September (the former yielding the largestincrease in four months).

The final revision of October’s University ofMichigan Consumer Confidence gauge is also due to cross the wires, withforecasts calling for a slight upgrade from flash estimates. Itremains to be seen whether such outcomes are potent enough tomeaningfully refuel the rally in risky assets into the weekend orif investors have sufficiently priced in the rosier near-termoutlook for US growth after yesterday’s GDP reading, allowingprofit-taking to prolong the current correction into the closingbell.

Asia Session : What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

23:01

GBP

GfK Consumer Confidence Survey (OCT)

-32

-30

-30

23:30

JPY

Household Spending (YoY) (SEP)

-1.9%

-3.5%

-4.1%

23:30

JPY

Job-To-Applicant Ratio (SEP)

0.67

0.67

0.66

23:30

JPY

Jobless Rate (SEP)

4.1%

4.5%

4.3%

23:30

JPY

Tokyo CPI Ex-Fresh Food (YoY) (OCT)

-0.4%

-0.4%

-0.1%

23:30

JPY

Tokyo CPI Ex Food, Energy YoY

-1.0%

-0.8%

-0.4%

23:30

JPY

Tokyo CPI (YoY) (OCT)

-0.5%

-0.5%

-0.3% (R-)

23:30

JPY

National CPI (YoY) (SEP)

0.0%

0.1%

0.2%

23:30

JPY

National CPI Ex-Fresh Food (YoY) (SEP)

0.2%

0.2%

0.2%

23:30

JPY

National CPI Ex Food, Energy (YoY) (SEP)

-0.4%

-0.4%

-0.5%

23:50

JPY

Industrial Production (MoM) (SEP P)

-4.0%

-2.1%

0.6%

23:50

JPY

Industrial Production (YoY) (SEP P)

-4.0%

-2.3%

0.4%

1:35

CNY

MNI October Business Condition Survey

58.47

-

59.84

4:00

JPY

Vehicle Production (YoY) (SEP)

-4.5%

-

1.8%

E uro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:45

EUR

French Consumer Spending (MoM) (SEP)

0.0%

0.2%

Low

6:45

EUR

French Consumer Spending (YoY) (SEP)

-0.7%

0.3%

Low

8:00

EUR

Italian Hourly Wages (MoM) (SEP)

-

0.0%

Low

8:00

EUR

Italian Hourly Wages (YoY) (SEP)

-

1.7%

Low

9:30

CHF

KOF Swiss Leading Indicator (OCT)

1.04

1.21

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.3953

1.4336

GBPUSD

1.5989

1.6176

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya , e-mail ispivak@dailyfx.com . Follow me on Twitter at @IlyaSpivak

To be added to Ilya 's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2011/10/28/FOREX_US_Dollar_Rebounds_in_Asia_SP_Futures_Hint_More_Gains_Ahead.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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