FX Daily Wrap Up

Today the US Dollar had a bit of a roller coaster ride from domestic and foreign news reports. Starting the American session, the Dollar was trading near the 1.2820 level against the Euro and near the 117.60 for the Japanese Yen. Looking towards the land of the rising sun, the Japanese Gross Domestic Product Report was quite bullish. The Japanese economy surged 2% vs. an expected 1%. The market was anticipating a print even weaker than 1.0%, and the news caused a major price movement. The strong GDP figure reintroduces the possibility of a rate hike from the Bank of Japan before the end of the year. However, if you dove into the report you would see that growth came from exports and not from domestic spending. Domestic demand is preferred for growth because more people are freely spending money; this is usually because there is a surplus of cash, which indicates that the economy as a whole is doing well.

The US had its own economic surprise in this morning's release of the Produce Price Index for October. The report showed a decline of 1.6 %, which was more than expected. But the real news about the report was the market's reaction. The USD/JPY rebounded to almost the days high of 117.85 before coming back to end the American session 10 pips below where it started at 117.50. Similar movements were seen with the Euro, but all the major pairs closed the American session near their opening range. XPRESSTRADE Analyst David Hilgeman