US Dollar May Look Past Conflicting Data, Rise on Fed Beige Book

Date

12/3/2014 5:05:14 AM

(MENAFN- DailyFX) DailyFX.com - r>

" style="text-align:justify"> Talking Points:

Aussie Kiwi Dollars Drop After Disappointing Australian 3Q GDP Report
British Pound Looks to Composite PMI Data to Inform BOE Policy Outlook
US Dollar May Rise as Upbeat Fed Beige Book Keeps Rate Hike Bets Alive

The Australian Dollar underperformed in overnight trade falling as much as 0.6 percent following a disappointing GDP data showing the economy added just 0.3 percent in the third quarter. That marked the smallest increase since the first quarter of 2013 and fell short of forecasts calling for a 0.7 percent increase.

The Aussie’s descent tracked a drop in Australia’s benchmark 10-year bond yield hinting the soft outcome weighed on RBA monetary policy expectations. Indeed a gauge of the priced-in outlook from Credit Suisse shows markets are now leaning toward seeing at least one interest rate cut over the coming 12 months.

The New Zealand Dollar followed its Oceanic counterpart downward. Australia is New Zealand’s largest trading partner and a slowdown there warns of ebbing cross-border demand ahead which bodes ill for the island nation’s growth and monetary policy prospects.

November’s UK Composite PMI data headlines the economic calendar in European hours. The index is expected to register at 56.2 marking the first acceleration in manufacturing- and service-sector growth in three months.

UK news-flow has cautiously improved relative to consensus forecasts over recent weeks hinting that analysts are underestimating the economy’s vigor and opening the door for an upside surprise. Such an outcome may fuel bets on the relatively sooner onset of BOE interest rate hikes boosting the British Pound.

The spotlight then turns to November’s US ADP Employment report and the ISM Non-Manufacturing Composite figure. The former is seen showing the pace of job creation (+222K) slowed compared with September (+230K) while the latter reflects a pickup in service-sector activity growth (56.5 vs. 56.3 prior).

US data outcomes have been broadly stable relative to consensus forecasts since early October. This means realized results will probably register close to expectations leaving the US Dollar torn between conflicting cues. An upbeat Fed Beige Book survey of regional economic conditions may be a tie-breaker sending the greenback higher amid firming Fed rate hike bets.

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Asia Session

" style="text-align:center"> GMT	" style="text-align:center"> CCY	" style="text-align:center"> EVENT	" style="text-align:center"> ACT	" style="text-align:center"> EXP	" style="text-align:center"> PREV
" style="text-align:center"> 21:45	" style="text-align:center"> NZD	Value of All Buildings (3Q)	" style="text-align:center"> 1.5%	" style="text-align:center"> 2.6%	" style="text-align:center"> 0.5%
" style="text-align:center"> 22:30	" style="text-align:center"> AUD	AiG Performance of Service Index (NOV)	" style="text-align:center"> 43.8	" style="text-align:center"> -	" style="text-align:center"> 43.6
" style="text-align:center"> 23:50	" style="text-align:center"> JPY	Loans & Discounts Corp (YoY) (OCT)	" style="text-align:center"> 2.55%	" style="text-align:center"> -	" style="text-align:center"> 2.24%
" style="text-align:center"> 0:01	" style="text-align:center"> GBP	BRC Shop Price Index (YoY) (NOV)	" style="text-align:center"> -1.9%	" style="text-align:center"> -	" style="text-align:center"> -1.9%
" style="text-align:center"> 0:30	" style="text-align:center"> AUD	Gross Domestic Product (QoQ) (3Q)	" style="text-align:center"> 0.3%	" style="text-align:center"> 0.7%	" style="text-align:center"> 0.5%
" style="text-align:center"> 0:30	" style="text-align:center"> AUD	Gross Domestic Product (YoY) (3Q)	" style="text-align:center"> 2.7%	" style="text-align:center"> 3.1%	" style="text-align:center"> 2.7%
" style="text-align:center"> 1:00	" style="text-align:center"> CNY	Non-Manufacturing PMI (NOV)	" style="text-align:center"> 53.9	" style="text-align:center"> -	" style="text-align:center"> 53.8
" style="text-align:center"> 1:35	" style="text-align:center"> JPY	Markit Services PMI (NOV)	" style="text-align:center"> 50.6	" style="text-align:center"> -	" style="text-align:center"> 48.7
" style="text-align:center"> 1:35	" style="text-align:center"> JPY	Markit/JMMA Composite PMI (NOV)	" style="text-align:center"> 51.2	" style="text-align:center"> -	" style="text-align:center"> 49.5
" style="text-align:center"> 1:45	" style="text-align:center"> CNY	HSBC Services PMI (NOV)	" style="text-align:center"> 53.0	" style="text-align:center"> -	" style="text-align:center"> 52.9
" style="text-align:center"> 1:45	" style="text-align:center"> CNY	HSBC Composite PMI (NOV)	" style="text-align:center"> 51.1	" style="text-align:center"> -	" style="text-align:center"> 51.7

European Session

" style="text-align:center"> GMT	" style="text-align:center"> CCY	" style="text-align:center"> EVENT	" style="text-align:center"> EXP	" style="text-align:center"> PREV	" style="text-align:center"> IMPACT
" style="text-align:center"> 6:45	" style="text-align:center"> CHF	Gross Domestic Product (QoQ) (3Q)	" style="text-align:center"> 0.3%	" style="text-align:center"> 0.2%	" style="text-align:center"> Medium
" style="text-align:center"> 6:45	" style="text-align:center"> CHF	Gross Domestic Product (YoY) (3Q)	" style="text-align:center"> 1.4%	" style="text-align:center"> 1.4%	" style="text-align:center"> Medium
" style="text-align:center"> 8:45	" style="text-align:center"> EUR	Markit/ADACI Italy Services PMI (NOV)	" style="text-align:center"> 50.2	" style="text-align:center"> 50.8	" style="text-align:center"> Low
" style="text-align:center"> 8:45	" style="text-align:center"> EUR	Markit/ADACI Italy Comp PMI (NOV)	" style="text-align:center"> 49.6	" style="text-align:center"> 50.4	" style="text-align:center"> Low
" style="text-align:center"> 8:50	" style="text-align:center"> EUR	Markit France Services PMI (NOV F)	" style="text-align:center"> 48.8	" style="text-align:center"> 48.8	" style="text-align:center"> Low
" style="text-align:center"> 8:50	" style="text-align:center"> EUR	Markit France Composite PMI (NOV F)	" style="text-align:center"> 48.4	" style="text-align:center"> 48.4	" style="text-align:center"> Low
" style="text-align:center"> 8:55	" style="text-align:center"> EUR	Markit Germany Services PMI (NOV F)	" style="text-align:center"> 52.1	" style="text-align:center"> 52.1	" style="text-align:center"> Low
" style="text-align:center"> 8:55	" style="text-align:center"> EUR	Markit/BME Germany Comp PMI (NOV F)	" style="text-align:center"> 52.1	" style="text-align:center"> 52.1	" style="text-align:center"> Low
" style="text-align:center"> 9:00	" style="text-align:center"> EUR	Markit Eurozone Services PMI (NOV F)	" style="text-align:center"> 51.3	" style="text-align:center"> 51.3	" style="text-align:center"> Low
" style="text-align:center"> 9:00	" style="text-align:center"> EUR	Markit Eurozone Comp PMI (NOV F)	" style="text-align:center"> 51.4	" style="text-align:center"> 51.4	" style="text-align:center"> Low
" style="text-align:center"> 9:30	" style="text-align:center"> GBP	Official Reserves (Changes) (NOV)	" style="text-align:center"> -	" style="text-align:center"> -$652M	" style="text-align:center"> Low
" style="text-align:center"> 9:30	" style="text-align:center"> GBP	Markit/CIPS UK Comp PMI (NOV F)	" style="text-align:center"> 56.2	" style="text-align:center"> 55.8	" style="text-align:center"> Medium
" style="text-align:center"> 9:30	" style="text-align:center"> GBP	Markit/CIPS UK Services PMI (NOV)	" style="text-align:center"> 56.5	" style="text-align:center"> 56.2	" style="text-align:center"> Medium
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Retail Sales (YoY) (OCT)	" style="text-align:center"> 1.6%	" style="text-align:center"> 0.6%	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Retail Sales (MoM) (OCT)	" style="text-align:center"> 0.5%	" style="text-align:center"> -1.3%	" style="text-align:center"> Low

Critical Levels

" style="text-align:center"> CCY	" style="text-align:center"> Supp 3	" style="text-align:center"> Supp 2	" style="text-align:center"> Supp 1	" style="text-align:center"> Pivot Point	" style="text-align:center"> Res 1	" style="text-align:center"> Res 2	" style="text-align:center"> Res 3
" style="text-align:center"> EURUSD	" style="text-align:center"> 1.2214	" style="text-align:center"> 1.2313	" style="text-align:center"> 1.2348	" style="text-align:center"> 1.2412	" style="text-align:center"> 1.2447	" style="text-align:center"> 1.2511	" style="text-align:center"> 1.2610
" style="text-align:center"> GBPUSD	" style="text-align:center"> 1.5449	" style="text-align:center"> 1.5560	" style="text-align:center"> 1.5598	" style="text-align:center"> 1.5671	" style="text-align:center"> 1.5709	" style="text-align:center"> 1.5782	" style="text-align:center"> 1.5893

" style="text-align:justify"> --- Written by Ilya Spivak Currency Strategist for DailyFX.com

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" style="text-align:justify"> Contact and follow Ilya on Twitter: @IlyaSpivak

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