01 Nov 2018

FOREX Newsletter

FOREX Newsletter

November 01, 2018

 

Pulse of the Market

·      U.S private employers added 227,000 jobs in October, above economists’ expectations

·      The Euro has been under pressure by political uncertainty in Germany

·      Sterling was higher as news of a possible Brexit deal as early as Nov. 21 boosted sentiment

·      The Loonie struggled to leverage stronger-than-expected growth data from Canada

The U.S Dollar inched down yesterday but remained near a 16-month high as upbeat data and rising Treasury yields increased demand for the greenback. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, inched down 0.13% to 96.88. Private sector payrolls in the U.S rose by the most in eight months in October, data showed ahead of the government nonfarm payrolls data on Friday. U.S private employers added 227,000 jobs in October, above economists’ expectations of a gain of 189,000 jobs. Meanwhile the yield on the benchmark United States 10-Year rose to a 1-week high of 3.149%. Euro-area inflation accelerated in October and underlying price pressures increased, complicating policy makers’ choices after the economy grew at its weakest pace since 2014. Consumer prices jumped 2.2 percent from a year earlier while a measure that strips out volatile components rose to 1.1 percent. Inflation has been stronger than the European Central Bank’s goal of just below 2 percent for the past five months, although energy has contributed a significant part to the pickup. President Mario Draghi has expressed confidence that a robust labor market and growing wages will also lift core prices, justifying a gradual withdrawal of monetary stimulus. The pound surged after a letter by U.K Brexit Secretary Dominic Raab spurred optimism that a divorce deal with the EU is in sight. Sterling strengthened against all of its major peers after Parliament released the Oct. 24 correspondence, in which Raab says he is happy to update lawmakers on the negotiations when a deal is finalized, and he currently expects Nov. 21 “to be suitable.” The pound trimmed its advance after a U.K government spokesman said he would not get involved in “interpretation” of the letter. The pound gained almost 1 percent to touch $1.2831 before paring its advance.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:45 Caixin China PMI Mfg (OCT) Medium 50 50
07:00 U.K Nationwide House Px n.s.a. (YoY) (OCT) Medium 1.9% 2.0%
08:15 Switzerland Consumer Price Index (YoY) (OCT) Medium 1.0% 1.0%
08:30 Switzerland PMI Manufacturing (OCT) Medium 58.7 59.7
09:30 Markit UK PMI Manufacturing s.a. (OCT) Medium 53 53.8
11:30 U.S Challenger Job Cuts (YoY) (OCT) Low 70.9%
12:00 Bank of England Bank Rate (NOV 1) High 0.75% 0.75%
12:00 BOE Asset Purchase Target (NOV) High 435b 435b
12:00 Bank of England Inflation Report High
12:30 BOE’s Carney speaks at press conference in London High
12:30 U.S Initial Jobless Claims (OCT 27) Medium 212k 215k
12:30 U.S Continuing Claims (OCT 2) Medium 1639k 1636k
13:30 RBC Canadian Manufacturing PMI (OCT) High 54.8
14:00 U.S ISM Manufacturing (OCT) High 59 59.8
14:00 U.S ISM Employment (OCT) High 58.8

 

Euro

The single currency is close to the lows of the year, largely as a result of widespread dollar strength. Euro-area inflation accelerated in October and underlying price pressures increased, complicating policy makers’ choices after the economy grew at its weakest pace since 2014. Consumer prices jumped 2.2 percent from a year earlier. Overall, the USD/JPY traded with a low of 1.1300 and a high of 1.1358 before closing the day around 1.1311 in the New York session.

 

Yen

The Japanese Yen pair hit its highest level since October 9 earlier yesterday before turning lower for the session on profit-taking following a strong three day rally. The rally was fueled by increased demand for higher risk assets and solid U.S economic data. The selling was likely related to profit-taking and position squaring ahead of U.S Non-Farm Payrolls report. Overall, the USD/JPY traded with a low of 112.78 and a high of 113.36 before closing the day around 112.92 in the U.S session.

 

British Pound

The British Pound surged and gilts declined after a letter by U.K Brexit Secretary spurred optimism that a divorce deal with the EU is in sight. Sterling strengthened after Parliament released the Oct. 24 correspondence. The pound trimmed its advance after a U.K government spokesman said he would not get involved in “interpretation” of the letter. Overall, the GBP/USD traded with a low of 1.2689 and a high of 1.2828 before closing the day at 1.2764 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower against its U.S counterpart yesterday as the greenback broadly climbed, offsetting data that showed a surprise strengthening of the domestic economy in August. The Canadian economy grew by 0.1 percent in August from July on gains in the oil and gas extraction sector, as well as finance and insurance. Overall, USD/CAD traded with a low of 1.3104 and a high of 1.3167 before closing the day at 1.3154 in the New York session.

 

Australian Dollar

The Australian Dollar fell after an eighth consecutive inflation disappointment vindicated the market for its pessimism about the outlook for interest rates down under, and as data suggested the Chinese economy is beginning to creak under the pressure of U.S. tariffs. Australian inflation rose at an annualized rate of 1.9% during the third-quarter. Overall, AUD/USD traded with a low of 0.7066 and a high of 0.7105 before closing the day at 0.7071 in the New York session.

Euro-Yen

EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 38 and lies below the neutral zone. In general, the pair has lost 0.44%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 39 reading and lies below the neutral zone. On the whole, the pair has gained 0.30%.

  

Aussie-Yen

Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is indicating a bearish stance. The Relative Strength Index is above 47 reading and lies below the neutral region. In general, the pair has lost 0.62%.

  

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 51 and lies above the neutral region. On the whole, the pair has lost 0.74%.

  

Sterling-Swiss

This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 50 and lies above the neutral region. In general, the pair has gained 0.79%.

 

Appendix

  

FOREX Closing Prices for October 31, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13427 1.13589 1.13007 1.1311 -0.0032
USD/JPY 113.131 113.366 112.786 112.924 -0.1750
GBP/USD 1.27066 1.28289 1.26989 1.27641 0.0060
USD/CHF 1.00504 1.00931 1.00318 1.0083 0.0033
USD/CAD 1.31074 1.31678 1.31048 1.31546 0.0047
EUR/JPY 128.32 128.522 127.635 127.739 -0.5660
GBP/JPY 143.738 145.111 143.594 144.147 0.4350
CHF/JPY 112.53 112.714 111.931 111.958 -0.5370
AUD/JPY 80.352 80.355 79.822 79.836 -0.5020
EUR/GBP 0.89287 0.89306 0.88407 0.88601 -0.0066
EUR/CHF 1.14015 1.14123 1.13772 1.14069 0.0005
GBP/CHF 1.27701 1.2891 1.27652 1.2872 0.0101

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1230 1.1265 1.1288 1.1324 1.1346 1.1382 1.1405
USD/JPY 112.10 112.45 112.68 113.03 113.26 113.61 113.84
GBP/USD 1.2569 1.2634 1.2699 1.2764 1.2829 1.2894 1.2959
USD/CHF 0.9984 1.0008 1.0046 1.0069 1.0107 1.0131 1.0168
USD/CAD 1.3054 1.3079 1.3117 1.3142 1.3180 1.3205 1.3243
EUR/JPY 126.52 127.08 127.41 127.97 128.30 128.85 129.18
GBP/JPY 141.94 142.77 143.46 144.28 144.97 145.80 146.49
CHF/JPY 110.91 111.42 111.69 112.20 112.47 112.98 113.25
AUD/JPY 79.12 79.47 79.65 80.00 80.19 80.54 80.72
EUR/GBP 0.8734 0.8787 0.8824 0.8877 0.8914 0.8967 0.9003
EUR/CHF 1.1350 1.1364 1.1385 1.1399 1.1420 1.1434 1.1456
GBP/CHF 1.2669 1.2717 1.2794 1.2843 1.2920 1.2969 1.3046

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

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