July 09, 2018
Pulse of the Market
· The U.S economy added 213,000 jobs in June, above forecasts for 200,000 new jobs
· U.S unemployment rate unexpectedly rose to 4%, the Labor Department said on Friday
· Sterling gained almost 0.5% last week to snap a three-week 1.5% decline
· U.S and China trade tariffs kicked in Friday, raising the prospect of a trade war
|The U.S Dollar slumped against its rivals Friday, on mixed U.S. economic data showing the economy created more jobs than expected but wage growth undershot estimates. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.34% to 93.81. The U.S. economy added 213,000 jobs in June, above forecasts for 200,000 new jobs while the unemployment rate unexpectedly rose to 4%, the Labor Department said on Friday. The Federal Reserve’s view that a tighter labor market would lead to wage growth, increasing inflationary pressures, continues to be challenged as average hourly earnings grew slower-than-expected for the month. Average hourly earnings grew 0.2%, undershooting economists’ forecast for a 0.3% increase. The weaker average hourly earnings print scaled back some bullish investor expectations for two Fed rate hikes this year. The softer average earnings indicator is likely to catch more attention as it highlights a still tame wage inflation environment. That could lead some market participants to start questioning whether we will see two Fed rate rises in second after all. The dollar was also weighed down by an uptick in the Canadian dollar as upbeat employment data, reaffirmed investor expectations that the Bank of Canadian would hike interest rates by 25 basis points next week. U.S, and China trade tariffs kicked in Friday, raising the prospect of a trade war between the world’s largest economic superpowers, but the reaction in safe-haven currencies was muted, as some said markets had priced in the impact. The Canadian Dollar will climb over the coming year, a Reuters poll showed, but forecasters are less bullish than they were a month ago as escalating trade uncertainty competes with expected Bank of Canada interest rate hikes. The poll of more than 40 foreign exchange strategists predicted the Canadian dollar will rise to C$1.30 to the greenback, or 76.92 U.S. cents, in three months, from around C$1.3140 on Thursday. Hawkish comments last week by Bank of Canada Governor Stephen Poloz have left money markets largely expecting the central bank to lift its benchmark interest rate, which sits at 1.25 percent, by 25 basis points next week.
|04:30||Japan Bankruptcies (YoY) (JUN)||Medium||-4.36%|
|05:45||Switzerland Unemployment Rate (JUN)||Medium||2.4%|
|06:00||German Trade Balance (MAY)||Medium||20.4b|
|06:00||German Current Account (euros) (MAY)||Low||22.7b|
|08:00||Switzerland Total Sight Deposits CHF (6 JUL)||Low|
|08:30||Euro-Zone Sentix Investor Confidence (JUL)||Low||9.3|
|19:00||U.S Consumer Credit (MAY)||Medium||$9.262b|
|22:45||New Zealand Card Spending Retail (MoM) (JUN)||Low||0.4%|
|22:45||New Zealand Card Spending (MoM) (JUN)||Low||0.5%|
|23:01||U.K BRC Sales Like-For-Like (YoY) (JUN)||Low||2.8%|
|23:30||ANZ Roy Morgan Weekly Consumer Confidence Index (8 JUL)||Low|
The single currency jumped in Friday’s trading session. The Euro was supported by the strong industrial production data from the Eurozone’s biggest economy and a Bloomberg report mentioning that some ECB members believe that postponing the first hike in the Euro Area until late-2019 could prove to be too late. Overall, the EUR/USD traded with a low of 1.1678 and a high of 1.1765 before closing the day around 1.1744 in the New York session.
The Japanese Yen pair closed lower last week in reaction to concerns over a fourth rate hike by the U.S. Federal Reserve and safe-haven buying due to the escalation of the trade dispute between the United States and China. Both factors contributed to lower Treasury yields which made the U.S Dollar a less-attractive asset. Overall, the USD/JPY traded with a low of 110.36 and a high of 110.76 before closing the day around 110.42 in the U.S session.
The British Pound continues to be very noisy in general, as we have around the 1.32 level. It looks as of the 1.30 level underneath is trying to for some type of significant support and at this point I think it’s very difficult to imagine that this market will break down below. The only thing keeping this market down is the uncertainty between the UK and the EU. Overall, the GBP/USD traded with a low of 1.3201 and a high of 1.3288 before closing the day at 1.3283 in the New York session.
The Canadian Dollar is expected to climb over the coming year, a Reuter’s poll showed, but forecasters are less bullish than they were a month ago as escalating trade uncertainty competes with expected Bank of Canada interest-rate hikes. The poll of more than 40 foreign-exchange strategists predicted the Canadian dollar will rise. Overall, USD/CAD traded with a low of 1.3074 and a high of 1.3148 before closing the day at 1.3100 in the New York session.
The Australian Dollar enjoyed a reprieve last week from the recent relentless selling pressure that had pushed the currencies to multi-year lows. Nothing happened domestically to trigger the technical reversals on the weekly charts. However, due to a shift in investor sentiment on the U.S Dollar, Aussie sellers were forced to make aggressive position-adjustments, sending prices higher. Overall, AUD/USD traded with a low of 0.7374 and a high of 0.7442 before closing the day at 0.7432 in the New York session.
EUR/JPY is trading above 14 and below 50, 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 56 and lies above the neutral zone. In general, the pair has gained 0.24%.
Currently, GBP/JPY is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 52 reading and lies above the neutral zone. On the whole, the pair has gained 0.22%.
Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 50 reading and lies above the neutral region. In general, the pair has gained 0.33%.
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 56 and lies above the neutral region. On the whole, the pair has lost 0.02%.
This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 48 and lies below the neutral region. In general, the pair has gained 0.17%.
|FOREX Closing Prices for July 06, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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