Dollar Rate Today (15/11): USD strikes a softer tone, outlook dominated by empire manufacturing, IP data
There has been little by way of major moves in Asia overnight and we see FX markets looking for a fresh stimulant at the London open:
The pound dollar exchange rate is trading 0.04 pct lower on a daily basis at 1.6059. The euro dollar exchange rate is meanwhile 0.06 pct 1.3451 and the Australian to US dollar pairing is 0.11 pct higher at 0.9326.
The dollar basket is meanwhile 0.06 pct higher at 8118.
Please keep in mind all quotations here are inter-bank spot rates. Your retail rate will be delivered with a spread being subtracted by your bank at their discretion. This is a competitive market though and the good news is that an independent FX provider will seek to beat your bank's rate, thus delivering up to 5% more FX. Please learn more here.
Fundamental outlook for the US dollar today
Today the empire manufacturing index and industrial production data will be dominate the outlook for the USD.
Analysts suspect it could provide some USD support, "but the concern in the US is more about potential shutdown related weakness in consumer demand and services than in manufacturing, so there shouldn’t be any major impact from today’s data," says a note from Lloyds Bank Research.
Lloyds say they don't expect the USD to break significantly lower, and the dollar basket should find 80.50 to be an effective short term support level.
Regarding the data, Industrial Production (MoM) (Oct) expected at +0.2%, down from last month's +0.6%.
NY Empire State Manufacturing Index (Nov): expected @ 5, last month was 1.52.
Technical outlook for the US dollar
Turning to the technicals; analysts are coy on the GBP-USD exchange rate with many a neutral tone being struck.
"1.5850-1.6260 is the big range in GBP/USD, and we see greater potential for a break of the upside, but the narrower 1.5950-1.6120/50 range seems likely to hold today," say Lloyds Bank Research.
ICN Financial are in the neutral camp:
"The pair is trading around 13% correction at 1.6070 which represents an intraday interval as showing on graph. Meanwhile, the pair is trading outside the ascending channel and above 23.6% correction in which the pair failed to stabilize below it.
"We prefer to be neutral in this report waiting for new confirmation signals that makes Risk/Reward ratio appropriate, whereas we need to confirm if the bullish move of the past two days is to retest the broken channel or a new bullish wave."
Turning to the euro dollar exchange rate's outlook, yesterday's unsavoury GDP numbers may continue to weigh on the pair into the end of the week.
"On the technical front, we note that the 55-day MA (1.3497) continues to repel upside probes. Initial support is expected towards 1.3430 before 1.3400 and gravity may prevail given the continued dovish mood set by the ECB in recent sessions," says Emmanuel Ng at OCBC Bank.
ICN Financial's take on the euro dollar is:
"The pair’s volatile trading yesterday stabilised mainly below 50% correction of the CD Leg of the bearish harmonic AB=CD Pattern and below the broken support in addition to Linear Regression Indicator 34 as showing on graph.
"Therefore, the bullish possibility is still valid and stabilising below 1.3555 will keep this possibility available, whereas the intraday trading today requires stability below 1.3470 to strengthen the bearish possibility."
