FX Update: The dollar has traded modestly softer
FX Update: The dollar has traded modestly softer into the London interbank opening, while the euro has traded perkily. EUR-USD edged out a two-week high at 1.0690, and EUR-JPY forayed further into five-month high territory, despite the uncertainty about Italy's referendum on constitutional reform this weekend. Markets are betting that a technocrat government will form should PM Renzi resign in the event of a "No" vote. The forex market has also been unperturbed by Reuters citing an unnamed source saying that most ECB council members are in favour of extending the QE program by six months beyond next March without tapering. USD-JPY has remained buoyant, holding around the 114.00 level, but has remained below the nine-and-a-half-month high seen at 114.82 yesterday. Market participants are treading cautiously into the release of the November U.S. employment report today. The release it less essential than is often the case this month with expectations for the Fed to hike this month by 25 bp fully discounted and with markets anticipating fiscal expansion when president-elect Trump takes up the reins at the White House.