Wed 17th Nov: US fundamentals optimistic, markets unimpressed

The currency markets persisted with their dollar dumping notwithstanding buoyant economic data releases from the world’s largest economy.
Producer prices registered the largest monthly increase in the last 14 years and rose 1.7% in October with the core prices rising a measly 0.3%. Moreover, the capital flows data released by the Treasury indicated a 6% surge in the foreign purchases of US stocks and bonds to $63.4 billion in September vis-à-vis a 5% decline in the previous month.
These positive fundamentals didn’t please the traders’ one bit and euro held around the 1.2950 mark. The euro zone officials at the E-12 ministers meeting commented on the rising euro but refrained from remarking on the topic of intervention.
It was noted however that the EU's Audit Commission failed for the 10th straight year to approve the EU's annual financial report citing fraud and incompetence as the ongoing reasons for the EU's ongoing failures.
The single currency would face an immediate resistance at 1.2980 and markets would await euro zone October CPI figures, which is anticipated to show a rise – an indication that ECB would be increasingly wary of talking down the currency.
Yen traded around the 7-month peak against the dollar in Tokyo trade with Nikkei flat at 11,150. Currency traders look to the G-20 meeting where the Asian Central Banks maybe pressurized to scale back their currency intervention practices.
Cable managed to hold above the 1.85 mark, prevailing over a disappointing UK housing report – UK RICS housing price survey plunged to almost 2-year bottom, falling to –42 in October against a –30 previous reading.