18 Дек 2018

FOREX Newsletter

FOREX Newsletter

December 18, 2018


Pulse of the Market

·      The U.S Empire State Manufacturing Index dropped sharply to 10.9, down from 23.3 points

·      British Prime Minister rescheduled a delayed vote in parliament on her Brexit plan for mid-January

·      The Euro clawed itself off recent lows yesterday as the dollar paused near 18-month highs

·      Canada exports many commodities, including oil, so its economy hurts by slower global growth

 

 

The U.S Dollar pulled back from an 18-month high yesterday after disappointing economic data. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.2% to 96.69, after an overnight high of 97.69. The Empire State manufacturing index was lower in December, adding to concerns over the health of the U.S. economy. The reading was at 10.90 from 23.30 in November, the New York Fed reported yesterday. Meanwhile, investors are looking ahead to Wednesday when the Federal Reserve is expected to increase rates by 25 basis points for the fourth time this year. Chances of a hike were priced in at 77.5%, according to Fed Rate Monitor Tool. Still, investors remain uncertain of the number of rate hikes in 2019 after dovish comments from Fed officials, who hint that interest rates are nearing neutral. Comments yesterday from U.S President Donald Trump added to the uncertainty, as he continued to criticize the pace of Fed hikes. Last week, the dollar enjoyed its best weekly performance since September, reaching an 18-month high on Friday. The euro, on the other hand, weakened last week after the European Central Bank cut inflation and growth forecasts and struck a cautious tone about the outlook for the world economy. The euro, meanwhile, rose 0.3 percent yesterday, even though EU statistics office Eurostat earlier lowered November’s inflation reading. Weaker-than-expected economic data from China and Europe last week sent investors toward the perceived safety of the dollar. Investors are now looking to a major speech by President Xi Jinping today to mark the 40th anniversary of China’s market reforms and opening up. China is also scheduled to hold its annual Central Economic Work Conference this week. The Canadian dollar weakened as lingering worries about global growth weighed on stocks ahead of a potential interest rate hike this week from the Federal Reserve. Wall Street lost ground as edgy investors waited for the Fed’s monetary policy guidance.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 New Zealand ANZ Business Confidence (DEC) Low     -37.1
00:00 New Zealand ANZ Activity Outlook (DEC) Medium     7.6
00:30 RBA Dec. Meeting Minutes (DEC 4) Medium      
06:45 Switzerland SECO Dec. 2018 Economic Forecasts Low      
09:00 German IFO Business Climate (DEC) Medium   101.7 102
09:00 German IFO Expectations (DEC) Medium   98.3 98.7
09:00 German IFO Current Assessment (DEC) Medium   104.9 105.4
13:30 Canada Manufacturing Sales (MoM) (OCT) Low   0.5% 0.2%
13:30 U.S Housing Starts (MoM) (NOV) Medium   0.2% 1.5%
13:30 U.S Building Permits (MoM) (NOV) Medium   -0.4% -0.6%
20:00 New Zealand Westpac Consumer Confidence (4Q) Medium     103.5
21:45 New Zealand Current Account GDP Ratio YTD (3Q) Medium   -3.6% -3.3%
23:30 Australia Westpac Leading Index (MoM) (NOV) Medium     0.08%
23:50 Japan Trade Balance (NOV) Medium   -¥630.0b -¥449.3b

Euro

The single currency clawed itself off recent lows yesterday as the dollar paused near 18-month highs and traders waited to see whether the U.S. Federal Reserve’s policy meeting this week would calm nerves about slowing global economic growth. Last week the dollar enjoyed its best weekly performance since September. Overall, the EUR/USD traded with a low of 1.1301 and a high of 1.1356 before closing the day around 1.1346 in the New York session.

 

Yen

The Japanese Yen gained ground in yesterday’s trading session. It was a quiet start to the week, with no Japanese events. In the U.S, the Empire State Manufacturing Index dropped sharply to 10.9, down from 23.3 points. This was well short of the estimate of 20.1 points. Today, the U.S releases housing starts and building permits. Overall, the USD/JPY traded with a low of 112.66 and a high of 113.50 before closing the day around 112.81 in the U.S session.

 

British Pound

The British Pound edged off 20-month lows on Monday as British Prime Minister Theresa May rescheduled a delayed vote in parliament on her Brexit plan for mid-January. Sterling inched higher as May confirmed the vote – postponed last week in the face of deep opposition – would happen in the week starting on Jan. 14. Overall, the GBP/USD traded with a low of 1.2572 and a high of 1.2644 before closing the day at 1.2621 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened, underperforming most other G10 currencies as lingering worries about global growth weighed on stocks ahead of a potential interest rate hike this week from the Fed. Canada exports many commodities, including oil, so its economy could be hurt by slower global growth. U.S crude prices were down 0.2 per cent at $51.12 a barrel. Overall, USD/CAD traded with a low of 1.3370 and a high of 1.3418 before closing the day at 1.3403 in the New York session.

 

Australian Dollar

The Australian Dollar revival of fortunes against its US cousin goes on, underpinned as it has been since its November beginnings by a key factor which is a hope for a trade rapprochement between Washington and Beijing. China is the prime customer of Australia’s vast raw-material export machine, while the U.S is an indispensable partner for Canberra on security matters. Overall, AUD/USD traded with a low of 0.7166 and a high of 0.7185 before closing the day at 0.7175 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 44 and lies below the neutral zone. In general, the pair has lost 0.07%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is indicating a bearish stance. The Relative Strength Index is above 38 reading and lies below the neutral zone. On the whole, the pair has lost 0.18%.

 

Aussie-Yen

Currently, the cross is trading above 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 42 reading and lies below the neutral region. In general, the pair has lost 0.45%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 60 and lies above the neutral region. On the whole, the pair has gained 0.11%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 37 and lies below the neutral region. In general, the pair has lost 0.28%.

 

Appendix

  

FOREX Closing Prices for December 17, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1306 1.13567 1.13015 1.1346 0.0045
USD/JPY 113.37 113.502 112.663 112.813 -0.5350
GBP/USD 1.2589 1.26447 1.25724 1.26212 0.0043
USD/CHF 0.9977 0.99855 0.99154 0.99275 -0.0060
USD/CAD 1.33823 1.34184 1.33703 1.34035 0.0014
EUR/JPY 128.197 128.567 127.842 128.014 -0.0920
GBP/JPY 142.739 143.207 142.135 142.339 -0.2530
CHF/JPY 113.608 114.138 113.469 113.59 0.1280
AUD/JPY 81.341 81.468 80.798 80.955 -0.3700
EUR/GBP 0.89786 0.90029 0.89713 0.89915 0.0010
EUR/CHF 1.12827 1.12893 1.1246 1.12653 -0.0022
GBP/CHF 1.2562 1.25728 1.24995 1.25284 -0.0035

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1258 1.1280 1.1313 1.1335 1.1368 1.1390 1.1423
USD/JPY 111.64 112.15 112.48 112.99 113.32 113.83 114.16
GBP/USD 1.2509 1.2540 1.2581 1.2613 1.2653 1.2685 1.2725
USD/CHF 0.9830 0.9873 0.9900 0.9943 0.9970 1.0013 1.0040
USD/CAD 1.3328 1.3349 1.3376 1.3397 1.3425 1.3446 1.3473
EUR/JPY 126.99 127.42 127.72 128.14 128.44 128.87 129.17
GBP/JPY 140.84 141.49 141.91 142.56 142.99 143.63 144.06
CHF/JPY 112.66 113.06 113.33 113.73 114.00 114.40 114.66
AUD/JPY 80.01 80.40 80.68 81.07 81.35 81.74 82.02
EUR/GBP 0.8943 0.8957 0.8974 0.8989 0.9006 0.9020 0.9037
EUR/CHF 1.1201 1.1224 1.1244 1.1267 1.1288 1.1310 1.1331
GBP/CHF 1.2421 1.2460 1.2494 1.2534 1.2568 1.2607 1.2641

 

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

 

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