US Jobless Claims Surprisingly Decrease, Risk Appetite Jumps - 22.11.2013

Risk appetite improved noticeably last night as the US Jobless Claims decreased to 323K the previous week compared to 344K two weeks ago, economists were expecting a decline to 333K. Moreover, US equities jumped to new highs due to better claims data as well as investors are cheered up amid pro dove Janet Yellen being the next Fed chairman. The Dow Jones advanced for the first time above 16,000 to close at 16,009.99, S&P 500 also closed higher by 0.80% at 1,795.85.

The US dollar index inched at 81.25 yesterday morning but early today is pressing on support at 80.91 for lower territory, we would expect the downside bias to prevail in the intraday as the risk sentiment improves.

US Dollar Index

At the same time, the US dollar against the Japanese Yen found resistance at 101.33 overnight reaching a new 4-month peak as the Yen got weaker because investors were looking for higher yielding assets. We are expecting that recent trigger of bullish bias would develop to a positive structure for the currency pair. Furthermore, the Japanese Yen weakened as the BOJ Governor commented that was ready to add to its ultra-loose monetary policy if inflation goal of 2% was at risk. The EURJPY was well underpinned, surging to a new 4-year peak at 136.53.

Lastly, the Australian dollar was under pressure against the US dollar despite that risk appetite was improving. Demand for the kangaroo currency remained low amid RBA head, Glenn Stevens, said that he is open to intervene and drive the Aussie lower. The currency pair is also technically down trending falling below support at 0.9269 yesterday and achieving early on Friday a more than 2-month low at 0.9168.

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