Dollar's retreat yesterday was relatively slow as renewed strengthen in treasury yield provided some support. 10 year yield closed up 0.032 at 1.790 and it's seems to be heading for a break of recent high at 1.801. Dollar index dipped to 98.33 and quickly recovered, currently trading around 98.7. The index is possibly turned into sideway consolidation below 99.11 as traders wait for heavy weight events next week. In other markets, WTI crude oil extended recent retreat and is back trading at 49.30 after failing to sustain above 50 handle. Gold's corrective recovery continues and is trading above 1260 but remains vulnerable for another fall through recent low at 1243.2.
EUR/USD turned sideway and recovered this week after hitting 1.0850 but strength is weak. Markets are waiting for clues on what ECB would do after the current QE program ends in March next year. ECB governing council member Ardo Hansson said that "there are a few more months of announced purchases to go, but we also see that the transmission of these different measures into, let's say to the level interest rates or other intermediate variables has been quite powerful." And, "at some point of time we have to say what comes after March, one possibility is to do that in December."
In Japan, BoJ governor Haruhiko Kuroda said that there is no need for the central bank to cut back government bond holdings He noted that "I don't think there will be the need for the BOJ to sell or reduce the amount of JGB holdings any time soon to maintain a goal of guiding (long-term rates) around zero percent." BoJ deputy governor Kikuo Iwata said "there is no limit to how much (the BOJ can) expand base money. But the amount of government bonds the BOJ needs to buy to hit its 2 percent inflation target depends on economic developments at the time."
On the data front, New Zealand trade deficit widened to NZD -1436m in September versus expectation of NZD -1125m. Australia import price index dropped -1.0% qoq in Q3 versus expectation of -0.8% qoq. UK Q3 GDP advance is the main focus in European session. Eurozone will release M3 money supply and Swiss will release UBS consumption indicator. US will release durable goods orders, jobless claims and pending home sales.