16 Ago 2018

FOREX Newsletter

   

FOREX Newsletter

August 16, 2018
 

 

Pulse of the Market

·      U.S retail sales rose 0.5% last month, but June’s retail sales were revised downward

·      The Empire State manufacturing index rose 5.30 points in August to a reading of 25.60

·      Concerns over Turkey saw demand for the safe-haven yen and Swiss franc increase

·      The Canadian Dollar weakened against its U.S counterpart yesterday as oil prices fell

 

The U.S Dollar steadied against its rivals at 13-month highs yesterday, but gains were limited by rising demand for safe-haven yen on fears turmoil in Turkey could spill over into other markets. The U.S dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.05% to 96.60. The lira rose sharply against the dollar for the second-straight day as Turkey doubled tariffs on some U.S imports, including alcohol, cars and tobacco in retaliation for U.S moves. The rise in the lira did little to ease investor concerns as analysts warned that while Turkey may take measures to support the lira, the country’s economy would likely plunge into a recession. A recession is on the horizon in Turkey, but the depth of the recession depends on the measures taken. Lower growth, higher interest rates and on balance a weaker currency would still make it difficult for certain Turkish companies to fulfill their external debt obligations, but a national debt crisis would be avoided. Concerns over Turkey saw demand for the safe-haven yen and Swiss franc increase, keeping gains in the greenback in check. A duo of economic reports on retail sales and regional manufacturing pushed the dollar to an intraday high, but the greenback struggled to hold gains. The Commerce Department said on Wednesday that retail sales rose 0.5% last month, but June’s retail sales was revised downward. The retail sales control group — which has a larger impact on U.S GDP — rose 0.5%, beating expectations for a 0.4% rise. The Empire State manufacturing index rose 5.30 points in August to a reading of 25.60, the New York Federal Reserve said Wednesday. That was its highest reading in 10 months. Elsewhere, bargain hunters scooped up the euro as it plunged to one-year low intraday against the dollar. The Canadian Dollar weakened against its U.S counterpart yesterday as oil prices fell and a 13-month high for the greenback pressured emerging markets and global stocks. Resale’s of Canadian homes rose 1.9 percent in July from June, notching the third straight monthly rise but remaining below the highs seen in recent years, the Canadian Real Estate Association said.

 

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
01:00 Australia Consumer Inflation Expectation (AUG) Medium     3.9%
01:30 Australia Employment Change (JUL) High   15.0k 50.9k
01:30 Australia Unemployment Rate (JUL) High   5.4% 5.4%
08:30 U.K Retail Sales Ex Auto Fuel (YoY) (JUL) Medium   2.7% 3.0%
09:00 Euro-Zone Trade Balance s.a. (JUN) Low   16.5b 16.9b
12:30 Canada ADP Publishes July Payrolls Report Low      
12:30 Canada Manufacturing Sales (MoM) (JUN) Low   1.0% 1.4%
12:30 U.S Initial Jobless Claims (AUG 11) Medium   215k  
12:30 U.S Continuing Claims (AUG 4) Medium   1741k  
12:30 U.S Housing Starts (MoM) (JUL) Medium   7.4% -12.3%
12:30 U.S Building Permits (MoM) (JUL) Medium   1.4% -2.2%
12:30 U.S Philadelphia Fed Business Outlook (AUG) Medium   22 25.7
23:30 RBA Governor Semiannual Testimony High      

Euro

The single currency has fallen more than 5 percent in 2018, and analysts see the downward trend continuing even if the market turmoil in Turkey eases. As euro-area growth slows and rate differentials lead investors to unwind bullish euro positions from earlier in the year. The euro touched a 13-month low yesterday. Overall, the EUR/USD traded with a low of 1.1299 and a high of 1.1353 before closing the day around 1.1347 in the New York session.

 

Yen

 

 

The Japanese Yen ended the session higher against the U.S Dollar. The currency is undervalued and especially sensitive to shifts in its central bank’s monetary policy – or hints of them – which suggests it may rise in the months ahead. The currency has been a popular go-to for investors fleeing the Turkish currency and emerging market crises. Overall, the USD/JPY traded with a low of 110.41 and a high of 111.41 before closing the day around 110.75 in the U.S session.

 

British Pound

The British Pound fell below $1.27 against the US dollar for the first time since June last year. Sterling – already weakened amid political turmoil over the government’s Brexit blueprint. The move was also attributed to the strength of the dollar. The drop against the dollar also comes on the back of weaker-than-forecast wage growth figures. Overall, the GBP/USD traded with a low of 1.2660 and a high of 1.2733 before closing the day at 1.2697 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened against its U.S counterpart as oil prices fell and a 13-month high for the greenback pressured emerging markets and global stocks. The greenback rose as data showed U.S. retail sales grew more than forecast in July. The price of oil, one of Canada’s major exports, was pressured by data showing rising U.S. crude inventories. Overall, USD/CAD traded with a low of 1.3048 and a high of 1.3172 before closing the day at 1.3143 in the New York session.

 

Australian Dollar

The Australian Dollar fell yesterday after official data confirmed that wage and inflation pressures are still missing in action down under, while traders continue to shun the antipodean currency amid a testing geopolitical and global economic environment. Wage growth is a hot-button issue for the Australian Dollar. Overall, AUD/USD traded with a low of 0.7200 and a high of 0.7245 before closing the day at 0.7235 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 25 and lies below the neutral zone. In general, the pair has lost 0.35%.

  

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 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 21 reading and lies below the neutral zone. On the whole, the pair has lost 0.57%.

  

Aussie-Yen

Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 30 reading and lies below the neutral region. In general, the pair has lost 0.37%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 54 and lies above the neutral region. On the whole, the pair has gained 0.21%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 18 and lies below the neutral region. In general, the pair has lost 0.28%.

 

Appendix

  

FOREX Closing Prices for August 15, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13427 1.13535 1.12996 1.1347 0.0001
USD/JPY 111.123 111.412 110.413 110.755 -0.4030
GBP/USD 1.27186 1.27336 1.266 1.26977 -0.0024
USD/CHF 0.99406 0.99807 0.99242 0.99367 -0.0006
USD/CAD 1.30605 1.31723 1.30482 1.31431 0.0083
EUR/JPY 126.061 126.348 124.88 125.664 -0.4450
GBP/JPY 141.346 141.745 139.869 140.629 -0.8070
CHF/JPY 111.763 111.917 110.939 111.481 -0.3340
AUD/JPY 80.424 80.541 79.671 80.189 -0.2960
EUR/GBP 0.89165 0.89373 0.88991 0.89368 0.0019
EUR/CHF 1.12762 1.13034 1.12412 1.12746 -0.0005
GBP/CHF 1.26441 1.26959 1.25896 1.26181 -0.0035

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1259 1.1279 1.1313 1.1333 1.1367 1.1387 1.1421
USD/JPY 109.31 109.86 110.31 110.86 111.31 111.86 112.31
GBP/USD 1.2587 1.2624 1.2661 1.2697 1.2734 1.2771 1.2808
USD/CHF 0.9857 0.9891 0.9914 0.9947 0.9970 1.0004 1.0027
USD/CAD 1.2946 1.2997 1.3070 1.3121 1.3194 1.3245 1.3318
EUR/JPY 123.45 124.16 124.91 125.63 126.38 127.10 127.85
GBP/JPY 137.87 138.87 139.75 140.75 141.63 142.62 143.50
CHF/JPY 110.00 110.47 110.97 111.45 111.95 112.42 112.93
AUD/JPY 78.86 79.26 79.73 80.13 80.60 81.00 81.47
EUR/GBP 0.8873 0.8886 0.8912 0.8924 0.8950 0.8963 0.8988
EUR/CHF 1.1181 1.1211 1.1243 1.1273 1.1305 1.1335 1.1367
GBP/CHF 1.2467 1.2528 1.2573 1.2635 1.2679 1.2741 1.2786

 

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

 

 

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