North American FX Open - Dollar hands back more of this week's gains

Heading into the last session of the week, it looks like the DOLLAR will once again register a rise on the week, but the US unit has continued to ease back from its best levels seen in midweek.

Overnight, BOJ Governor Ueda said the central bank has time to consider its next policy steps, signaling it won’t hike interest rates next week, as widely expected, even after the Yen fell to an almost three-month low.

Tokyo CPI, meanwhile, slowed below 2.0% y/y in October for the first time in five months on energy prices. However, the cores all beat expectations ahead of the MPM and Japan's general election.

Also overnight, the PBOC kept its one-year medium-term lending facility rate at 2.00%, after slashing funding costs by the most on record a month ago, suggesting Beijing are cautiously easing monetary stimulus to support the economy. Meanwhile, a senior IMF official said China's recent barrage of fiscal measures fall short of what’s needed to address deflationary risks plaguing the world’s second-largest economy.

The European morning session has delivered a mixed set of data updates. The German IFO survey beat expectations rising to 86.5 in October compared to the 85.6 forecast and the 85.4 print in September, but the ECB's inflation expectations survey fell by more than expected. The one year outlook slid to 2.4% from 2.7%, while the three year timeframe fell to 2.1% from 2.3%. Finally EZ M3 Money Supply rose by 3.2% y/y, which was better than the 2.9% y/y forecast and was the highest reading since December 2022.

Meanwhile the ECB's Simkus stated that he sees no obvious case for a 50bps interest rate cut, but admitted that there is a need to further reduce still restrictive rates.

On the US election front, a Reuters/Ipsos poll showed that Trump has gained support from Hispanic and Black voters, while Harris has increased her support from white women.

In Middle East news, US Secretary of State Antony Blinken is said to be pushing for a Gaza settlement as negotiators prepare to meet, but Israel and Hamas are accusing each other of inflexibility.

Data today includes US durable goods orders and the UMich final sentiment survey, as well as Canadian retail sales.

Central bank speakers scheduled include the Fed's Collins, the ECB's Villeroy and the BoC Governor Macklem.

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