The yen has posted considerable gains in the Wednesday session. In North American trade, USD/JPY is trading at 111.64, down 0.71% on the day. The yen is at its highest level against the dollar since late September. Japanese banks are closed for a holiday, and there are no Japanese events on the schedule. In the US, durable goods reports were a mix. Core Durable Goods Orders gained 0.4%, matching the forecast. However, Durable Goods Orders declined 1.4%, well of the forecast of a 0.4% gain. The UoM Consumer Sentiment report came in at 98.5, above the forecast of 0.4%. Later in the day, the Federal Reserve releases the minutes of its November policy meeting.
The markets are keeping an eye on the Federal Reserve, which will release the November minutes later in the day. In October, the Fed announced that it would taper its balance sheet, and those reductions of $10 billion commenced around the time of the November meeting. The odds of upcoming rate hikes remains very high, with fed futures priced in at 91% and 89%, respectively. If the minutes reinforce the market perception that more markets are just around the corner, the US dollar could gain ground.
US construction numbers continue to beat expectations. On Monday, it was the turn of Existing Home Sales, which climbed to a 4-month high. On Friday, Building Permits and Housing Starts impressed the markets. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Starts also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.
