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Forex – Dollar down in Asia nearly 1% against yen on trade concerns – Investing.com

Investing.comForex - Dollar down in Asia nearly 1% against yen on trade concernsInvesting.comInvesting.com - The dollar fell almost 1% against the yen on Monday as fears grow that President Donald Trump's "America First" policy could lead to wide trade war with key Asian economies and that along with plan to renegotiate the North American Free ...FOREX-Dollar drops as investors await details of Trump's policiesYahoo FinanceYen Gains With Gold as Stocks Decline Across Asia: Markets WrapForex Factoryall 27 news articles »

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Canada: December Inflation Rate Rises to 1.5%

Canada’s annual inflation rate rose less than expected in December as cheaper food costs offset higher gasoline prices, data from Statistics Canada showed on Friday, leaving inflation below the Bank of Canada’s target. The annual inflation rate rose to 1.5 per cent from November’s 1.2 per cent, short of analysts’ forecasts for an increase to 1.7 per cent. Gasoline prices jumped 5.5 per cent compared to the year before. But annual food prices fell for the third month in a row and were down 1.3 per cent in December as Canadians paid less for fresh fruit and vegetables. Two of the three new measures of core inflation the Bank of Canada established late last year showed underlying inflation was closer to the central bank’s 2 per cent target. CPI median, which shows the median inflation rate across CPI components, held at 2.0 per cent after the previous month was revised up, while CPI trim, which excludes upside and downside outliers, was also steady at 1.6 per cent. But CPI common, which the central bank has said has the best correlation to the output gap, was furthest away from target, edging up to 1.4 per cent from 1.3 per cent. Common measures price changes across categories in the CPI basket. The Globe and Mail

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Will Trump focus on protectionist policies, or again mention a too-strong dollar?

Friday January 20: Five things the markets are talking about It’s been a busy week for capital markets. Investors have had to deal with direct intervention rhetoric by the U.S president elect that the dollar is too strong, “hawkish” comments on Wednesday by Fed Chair Yellen and then followed by somewhat “dovish” comments on Thursday. In Europe, the ECB has stuck to its super-easy monetary policy, telling those calling for a tightening – like economic powerhouse Germany – to be patient as the union slowly regains its economic health. Investors even had the time to pull -$3.1B from U.S based stock funds this week, showing a waning appetite for risk ahead of Mr. Trump’s inauguration as 45th U.S. president. The market is looking for clarity from the Trump administration. Today all eyes will be on the content and style of President’s elect inauguration speech for indications that the administration will follow through on pro-growth campaign promises. Will the new POTUS focus on protectionist policies, or again mention a too-strong dollar? If Trump focuses on fiscal stimulus, the dollar should find support, if he talks trade restrictions and penalties, expect much more volatility with some deep pullbacks for the ‘mighty’ buck. 1. Equities provide mixed results ahead of Trump’s inauguration Asian bourses have generally closed out the week lower as investors continue to wait and see what the Trump administration is about to bring. A solid economic Q4 finish for China (GDP +6.8% vs. +6.7%) has helped equities climb after bouts of selling over the past fortnight. The Shanghai Composite closed up +0.7% after declining six of the prior eight sessions while the Shenzhen Composite gained +1.5%. Elsewhere, Hong Kong’s Hang Seng was down -0.6%, while the Aussie S&P/ASX 200 index fell -0.7% amid declines in commodity stocks. Japan’s Nikkei Stock Average rose +0.3%, notching a third-consecutive gain, as insurers rose on rising yields of long government bonds. In Europe, equities are trading higher as market participants digest ECB Draghi’s dovish comments yesterday. The market is also nervous ahead of Trump’s inauguration ceremony scheduled later today. Financials are leading the sector gains in the Eurostoxx 600, while commodity and mining stocks are trading lower in the FTSE 100. U.S futures are trading in the black (+0.2%). Indices: Stoxx50 +0.2% at 3,295, FTSE flat at 7,208, DAX flat at 11,600, CAC-40 +0.1% at 4,844, IBEX-35 flat at 9,382, FTSE MIB +0.1% at 19,510, SMI +0.1% at 8,278, S&P 500 Futures +0.2% 2. Oil finds support ahead of compliance meeting Ministers from OPEC countries are scheduled to join their counterparts from Russia and Oman in Vienna over the weekend to discuss whether oil producers are complying with the agreement reached last year to cut production to prop up prices. The meeting is an effort to convince skeptical markets that the oil exporters are serious about cuts. The Saudi’s, which are expected to attend the meeting along with fellow OPEC members Algeria, Kuwait and Venezuela, have already said they have cut production below +10m bpd for the first time in nearly two-years. Brent crude future prices are up +68c at +$54.84 a barrel, while U.S. West Texas Intermediate (WTI) crude oil futures are trading up +63c at +$52 a barrel. Gold (+$1,199.64) prices are holding steady, supported by a weaker dollar. The yellow metal is heading for its fourth weekly gain, with investors waiting for Trump’s first steps as president after he takes office later today. Market remains wary of the potential impact of his policies. The metal is on track to end the week up nearly +1%. Silver is also poised for a fourth consecutive weekly gain. 3. Sovereign yields continue to push higher Germany’s benchmark 10-year government bond yield have rallied to a one month high ahead of the U.S open as U.S. Treasuries come under renewed selling pressure. The 10-year Bund yield has backed up +3bps to +0.333% with other euro zone bond yields also giving up earlier falls to trade higher in the European session. U.S. Treasury yields have been pushed higher this week by stronger-than-expected economic data and by comments by Fed Chair Janet Yellen signaling a “steadily rising path” for U.S. rates. Ahead of the open, U.S 10’s are trading at a two-week high of + 2.506%. 4. Bouts of ‘Big” dollar volatility ahead of Trump’s speech The FX majors have been more volatile over the past 24-hours, with comments by incoming Treasury Sec Mnuchin calling the dollar “very, very strong” weighing on USD late in U.S hours yesterday, followed by somewhat less hawkish Fed Chair Yellen stressing continued uncertainty on the fiscal side and ongoing short-term headwinds. Ahead of the U.S open, Europe’s single unit is little changed outright (€1.0650), not even that vulnerable to the ECB’s Survey of Professional Forecasters who sees 2019 inflation remaining below both ECB staff projections and target. Their comments basically reinforce ECB President Draghi’s comments yesterday – he noted inflation had increased lately, but the underlying pressures remained subdued. Sterling is on the move lower after this morning disappointing data – retail sales for December missed expectations (see below) – GBP outright is -0.57% lower at £1.2283. 5. Weakest U.K Retail Sales in five-years U.K. retail sales fell last month, slipping -1.9% which is a whopping -1.7% miss on market expectations. The headline print is the biggest month-on-month slowdown since April 2012. Digging deeper, analysts note that the main drivers of the poor figures include a -7.3% drop in sales for household goods stores (i.e hardware, furniture, and appliance) as well as weaker clothing sales, partly thanks to rising prices. A slowdown in Internet sales, due to a more spread out Black Friday-Cyber Monday discount period has also played a part.

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Forex – Aussie rebounds after China GDP as Asia awaits Trump speech – Nasdaq

Investing.comForex - Aussie rebounds after China GDP as Asia awaits Trump speechNasdaqInvesting.com - The Aussie rebounded and the dollar gave up early gains against the yen after a China data suite led by GDP raised regional sentiment in otherwise cautious trade as investors await the inaugural address of Donald Trump as president of ...Forex - Aussie down in Asia as China GDP, retail, industrial data eyedInvesting.comChina's future actions could warrant forex manipulator label -Treasury nomineeReutersall 488 news articles »

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Aussie Dollar Resilience

3:12pm The Australian dollar jumped to a two-month high after data showed China’s economy expanded at a faster-than-expected pace in the fourth quarter of 2016. China is Australia’s No.1 trading partner while the Aussie is often seen as a liquid proxy for the yuan. The dollar is currently trading at US75.82¢, just below today’s peak of US75.89¢, a level not seen since November 11. The Aussie is up about 1 per cent this week and is on track to clock its fourth straight weekly gain. It is up 5.3 per cent in January so far, making it one of the best performing major currencies in the world. “I have been fielding more questions about the Aussie’s resilience over the past 24 hours than any other currency,” said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific. “Australia (is) an oasis in this politically contentious global environment. In addition to the political stability, yields remain attractive.” The Aussie extended its winning streak elsewhere. It touched a 1-1/2-year peak against the euro after the head of the European Central Bank pointed to subdued inflation and the need for further monetary policy stimulus. It also rose on the yen to be near a one-month high. Investors are now awaiting the inauguration of Donald Trump later on Friday for further cues. Trump will be sworn in as the 45th president of the United States. “Donald Trump will take centre stage as we begin a new chapter in American politics and global financial markets. Buckle up as we are likely in for a wild ride these next 100 days,” Innes said. The Sydney Morning Herald

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Aussie on a roll post China GDP

[REUTERS SYDNEY] The Australian dollar rose again on Friday to hit a near 2-1/2-month high after data showed China’s economy expanded at a faster-than-expected pace in the fourth quarter of 2016. China is Australia’s No 1 trading partner while the Aussie is often seen as a liquid proxy for the yuan. The Australian dollar was last up 0.2 per cent at US$0.7577 after briefly climbing to US$0.7589, a level not seen since Nov 11. The Aussie is up about 1 per cent this week and was on track to clock its fourth straight weekly gain. It is up 5.3 per cent in January so far, making it one of the best performing major currencies in the world. “I have been fielding more questions about the Aussie’s resilience over the past 24 hours than any other currency,” said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific. “Australia (is) an oasis in this politically contentious global environment. In addition to the political stability, yields remain attractive.” Data from China showed the world’s second-largest economy expanded 6.8 per cent in the fourth quarter, compared with expectations of 6.7 per cent, helped by higher government spending. THE BUSINESS TIMES via REUTERS

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