The US dollar remained steady during Asian and European sessions on Wednesday, holding within tight ranges against its major counterparts. Quiet trading is seen as traders’ cautiousness ahead of tomorrow’s ECB policy meeting, as markets are awaiting signals from central bank’s president Mario Draghi about ECB’s QE programme that is likely to extend.

The dollar index ticked lower on Wednesday, but remains supported above psychological 100.00 level, where recent pullback found support.
The Euro was flat on Wednesday, after pullback from fresh recovery high at 1.0795 erased a part of recent strong rally after the euro rose significantly on unexpected reaction on Italy’s referendum ‘no’ outcome.

The single currency was marginally higher on Wednesday, showing gains of 0.16%, after Tuesday’s 0.8% fall.

British pound was among top losers on Wednesday, as it slid 0.83% against the dollar, on downbeat UK data. Industrial production declined by 1.3% in October, undershooting expectations for an uptick of 0.2%. Sterling is in red for the second day, extending pullback from nine-week high at 1.2272, when pound probed above strong technical barrier at 1.2720, driven by comment of UK Chancellor Philip Hammond.

The dollar ran out of stem against yen earlier today, pressuring again 114.00 handle that was broken on today’s extension to 114.38 high. Despite strongly bullish studies, the dollar may extend its consolidation after recent strong rally, with technical signals of possible further easing.

Australian dollar managed to recover some of overnight’s losses, driven by downbeat GDP data from Australia, but remains in red for the second day, following repeated rejection at strong 0.7500 barrier.

Gross domestic product fell unexpectedly by 0.5% in Q3, coming well below consensus for 0.3% rise and Q2 upward-revised 0.6% result.

Spot gold bounced on Wednesday, after holding within narrow consolidation the previous day and hit initial barrier at $1177. The yellow metal shows technical signals for stronger correction of post-US elections fall, however, the dollar remains well supported on expectations of US rate hike next week that would be strong limiting factor for Gold’s near-term recovery attempts.

US Crude oil fell on Wednesday, losing over 1% on fresh bearish extension that is pressuring psychological support at $50 per barrel. Oil lost ground as investors showed strong doubts on the potential impact of OPEC’s output cut, agreed on last week’s cartel meeting, on a persistent supply overhang, after OPEC and Russia posted record output in November.

Energy Information Administration (EIA) figures due later today, forecast to show a fall of 1.03 million barrels, compared to the draw of 0.9 million barrels last week.

European stocks were strongly bullish on Monday, extending gains for the third straight day. Britain’s FTSE 100 index rose 1.25%, German Dax was up 0.76%, while French CAC40 index gained 0.58%

Wall Street was little changed at the open on Wednesday, as investors assessed whether a post-election rally, which has powered the major indexes to a series of record highs in the past month, had more room to run.

The Dow Jones was down 0.1%, the S&P 500 index was down or 0.11%,while the Nasdaq composite index was down 0.25% percent, after Wednesday’s opening bell., Market Analysis