The Loonie rallied upon the announcement of tax cuts.

Key Movers

Equity markets and oil bounced ahead of the Thanksgiving holiday in the US and the US dollar continued falling, leaving its status of a safe haven momentarily. On a different note, MNI (Market News) reported that the Fed might pause the rate hike cycle as early as Spring, according to senior people at the Fed, causing the US dollar index to fall 0.32 percent yesterday. The spotlight now turns to the Fed, which is due to speak next week (including Fed Vice Chairman Clarida on Tuesday and Fed Chairman Powell on Wednesday).

The economic data in the US was mixed. Durable goods orders (for October) were weaker at -4.4 percent vs. -2.6 percent while existing home sales were up by 1.4 percent vs. the 1 percent forecast, the first rise since March. University of Michigan consumer sentiment was revised down from the preliminary number (97.5 vs. 98.3), but consumer confidence remains at a high level.

Some news for a " risk on" environment was the South China Morning Post reporting that the US has excluded Peter Navarro from the invite list for the Trump-Xi summit, a sign the US is going into the meeting with a more appeasing approach


There was less volatility in the Euro yesterday, much like many other major currency pairs. It came despite news that the European Commission had rejected Italy’s revised budget and that the EC was considering disciplinary actions against the country for excessive debt.



However, this morning’s reports suggest that a budget agreement can be reached, at least according to comments by budget commissioner Pierre Moscovici, which is helping to calm a few nerves. EUR/USD is trading above the 1.1400 handle, but it tested an intraday high of 1.1433.


GBP/USD was positive this morning following reports that the UK and the European Union have reached an agreement on a draft text outlining future EU-UK ties post-Brexit.

The pound jumped to the highs of the day against the dollar, with GBP/USD hitting highs of 1.2927, trading at 1.2875 at this moment. Bloomberg reported that the draft text says that the EU and the UK will commit to 'deep' customs cooperation and build on 'single customs territory'. The EU is to recognize UK's independent trade policy and the transition period can be extended for up to "one or two years".


The Australian dollar managed to recoup some losses from Tuesday and clawed back towards the 0.7300 handle on Wednesday. With a recovery in US equities, a weaker Greenback and a jump in European stocks, the Aussie dollar bounced from a low of 0.7202 to touch an eventual high of 0.7277 during the trading session yesterday.




There’s no Australian economic data due between now and the end of the week and, with it being a public holiday in the US, it could be a quiet next couple of days for the AUD/USD.


NZD/USD lost ground overnight after riding a wave of improving risk appetite through the trading session yesterday. There was no stand-alone reason for the move lower, but it seems traders were keen to square up some of their positions ahead of the US holiday. There was a bit of a decline in NZ short-term yields overnight, which has no doubt weighed on the Kiwi.