Psychology for major markets Nov 20
USD firm as Fed easing hopes fade, Nvidia results strong
EUR/USD – USD generally firmer as expectations of Fed easing in December continue to fade and Nvidia results come in stronger than expected. EUR/USD moves towards the lower end of the 1.14-1.18 range.
USD/JPY – USD/JPY continuing to make new 9 month highs in spite of plenty of verbal intervention. Risks of actual intervention increasing with the JPY near all time lows in real trade-weighted terms, but momentum clearly higher.
EUR/GBP – EUR/GBP consolidation blow the recent highs awaiting the upcoming Budget on November 26. Risks still look to be on the upside given strong likelihood of a December rate cut if the Budget is tight as expected, while a looser Budget would undermine confidence.
AUD/USD – AUD/USD showed a more positive tone helped by strong labour market data but slipping back with a stronger USD. But there is strong support on a 0.64 handle, and risks are biased upside.
Equities – S&P 500 rising on better than expected Nvidia results, but remains at extended levels and upside remains limited as hopes of a Fed December rate cut fade.