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In spite of trade uncertainties looming over the greenback, the USDCZK pair is bound to reach its resistance as it steadily climbs. Although, as of the moment, the buck is gradually declining as the United States celebrates Thanksgiving Day. The Czech Central bank is deploying a wait-and-see tactic as it leaves its interest rates unchanged in the earlier half of the month. However, that wasn’t a surprise for traders despite Czechia’s economy slowing down in the third quarter of the year. Earlier this year, the Czech economy went down to 2.5% in Q3 on a Year-over-Year basis. The result was slightly off from the Czech National Bank’s projections of 2.7% prior. The last time that Czechia’s GDP growth reached that level was in the first quarter of 2016. Then yesterday, the Czech Central Bank decided to keep its countercyclical capital buffer rate for its capital reserves at 2.00%. However, the bank didn’t guarantee further easing or tightening in the future.
The Japanese yen steadies after the Bank of Japan Governor Haruhiko Kuroda gave a speech in front of the Japanese Parliament’s lower house earlier today. The pair’s latest strength, which resulted in an upward rally in the past sessions came after the United States President Donald Trump signed the Hong Kong Human Rights and Democracy Act into law. But this Friday the Japanese yen is struggling to find a clear direction in sessions as it gets stuck between trade war and BOJ updates. Aside from those, the rough household spending projection for October is weighing on the JPY. Earlier today, a survey on 15 economists said that Japan’s household spending is expected to fall to its sharpest since May 2018 by 3%, all thanks to Tokyo’s tax hike that started on October 1st. The Japanese government pumped its sales tax from 8% to 10%, which also resulted in positive figures to the month prior due to consumers rushing to buy goods.
With weak figures from the country’s economic performance, the Indian rupee is expected to be dragged by the US dollar higher in trading sessions. Earlier this Friday, the Ministry of Statistics and Program Implementation of India released the country gross domestic product growth for the third quarter of 2019. According to the report, India’s GDP went down from 5% in the second quarter to 4.5% on a Quarter-over-Quarter basis, falling further from 4.7% projections prior. The country’s infrastructure output also continued to contract from -5.2% prior to -5.8% on a Year-over-Year basis according to the Indian Ministry of Commerce and Industry. This comes in a bad time for the Indian rupee, raising concerns about future easing from the Indian central bank. Just today, a senior Finance Ministry official from India said that the Reserve Bank of India has ample room to reduce its key policy rate in next month’s meeting.
As Hong Kong’s gross domestic growth remains stagnant, the Hong Kong dollar is steadily regaining its footing. The pair is set to bounce off its resistance before 2019 ends. Although the figures aren’t that impressive, traders still took it as a positive sign because it’s not contracting. Hong Kong gross domestic product remains stagnant at -2.9% on a Year-over-Year basis according to the HK Census and Statistics Department earlier this year. While on a Quarter-over-Quarter basis, it’s still stagnant at -3.2%. Aside from that, investors’ hope is slowly being revived from the latest law that the US passed. Earlier today, Chinese owned media reported that Hong Kong and Thailand reached a free trade agreement. Carrie Lam addressed the violence and pro-democracy movements in Hong Kong, saying that the city has not been greatly damaged, and the Hong Kong economy remains strong during her speech in Bangkok, Thailand.