July 10, 2018
Pulse of the Market
· The U.S Dollar traded lower after the latest U.S jobs report pointed to sluggish wage growth
· Sterling was higher climbing 0.53% to 1.3356, having recovered from a low of 1.3284
· The single currency gained after data showed that German exports rose by more than imports
· The trade sensitive Australian dollar Strengthened, with its highest level since mid-June
|The US Dollar traded lower against all of the major currencies in the first few days of the third quarter. While it may be tempting to call this a peak, it is too early for all the bulls to retreat. However, all of the major currencies traded higher against the greenback with EUR/USD ending the week above 1.17. AUD/USD also saw gains, its rally stopped at the top of its 3-week range. Most importantly, USD/JPY ended the week above 110 because even though Friday’s labor market report fell short of expectations, the data is strong enough for the Federal Reserve to proceed with raising interest rates. Sterling should be trading much higher but unfortunately, Prime Minister May’s unpopular Brexit plan is hampering the currency’s rally. May is having a very difficult time gathering internal and external support for her complicated customs setup. The start of week’s trade was dominated by the drama from UK as Theresa May’s Brexit minister Davis resigned from her government in protest over her negotiating stance. Mr. Davis stated that he would not be able to deliver on her position as it would involve the UK giving up too much independence on the rulemaking front in order to stay in the customs union. Last week’s economic reports showed widespread improvements in the UK economy. The manufacturing, service and construction sectors all saw improvements in the month of June that took the composite PMI index to its highest level in 8 months. Thanks to a strong of positive developments, euro rose to a 3-week high against the US dollar. After reaching a deal with the EU on migration, Angela Merkel averted a collapse of Germany’s government by securing an agreement with her coalition partner the Christian Social Union.|
|01:30||Australia NAB Business Confidence (JUN)||Medium||6|
|01:30||China Producer Price Index (YoY) (JUN)||Medium||4.5%||4.1%|
|01:30||China Consumer Price Index (YoY) (JUN)||High||1.9%||1.8%|
|06:00||Japan Machine Tool Orders (YoY) (JUN)||Medium||14.9%|
|08:30||U.K Visible Trade Balance (Pounds) (MAY)||Medium||-£12,000||-£14,035|
|08:30||U.K Industrial Production (YoY) (MAY)||Medium||1.9%||1.8%|
|08:30||U.K Manufacturing Production (YoY) (MAY)||Medium||1.9%||1.4%|
|08:30||U.K Statistics Office Publishes First Monthly Estimate of GDP||High|
|09:00||German ZEW Survey Current Situation (JUL)||Medium||78.2||80.6|
|09:00||German ZEW Survey Expectations (JUL)||High||-18.5||-16.1|
|09:00||Euro-Zone ZEW Survey (Economic Sentiment) (JUL)||High||-12.6|
|11:00||U.K NIESR Gross Domestic Product Estimate (JUN)||Medium||0.2%|
|12:15||Canada Housing Starts (JUN)||Medium||210.0k||195.6k|
|12:30||Canada Building Permits (MoM) (MAY)||Medium||-0.5%||-4.6%|
|14:00||U.S JOLTS Job Openings (MAY)||Low||6660||6698|
|23:50||Japan Machine Orders (YoY) (MAY)||Medium||10.2%||9.6%|
The single currency rose to its highest since June 14 yesterday as investors bought riskier assets following favorable U.S jobs data last week. Investors appear to be ignoring the worsening trade conflict between the United States and China, preferring to focus on decent economic numbers. Data showing a healthy rise in German exports have also helped. Overall, the EUR/USD traded with a low of 1.1731 and a high of 1.1789 before closing the day around 1.1749 in the New York session.
The Japanese Yen ticked lower yesterday. In North American trade, USD/JPY traded up 0.09% on the day. On the release front, Japan’s current account surplus narrowed to JPY 1.85 billion, crushing the estimate of JPY 1.18 billion. Today, Japan releases machine tool reports and PPI, while the U.S publishes JOLT Jobs Openings. Overall, the USD/JPY traded with a low of 110.33 and a high of 110.88 before closing the day around 110.82 in the U.S session.
The British Pound skidded lower yesterday after British foreign minister Boris Johnson resigned, with the pound falling against both the dollar and the euro. Johnson followed former Brexit minister David Davis in resigning. Davis had resigned last night in opposition to Prime Minister Theresa May’s plan for life after leaving the European Union. Overall, the GBP/USD traded with a low of 1.3187 and a high of 1.3360 before closing the day at 1.3255 in the New York session.
The Canadian Dollar weakened pulling back from a nearly four-week high, as investors weighed whether cautious language might accompany an expected BOC interest rate hike. The BOC likely hike interest rates as strong job growth and rising inflation pressures override concerns about a deepening trade rift with the United States, a Reuters poll found. Overall, USD/CAD traded with a low of 1.3063 and a high of 1.3120 before closing the day at 1.3104 in the New York session.
The Australian Dollar has suffered against its US counterpart since the start of the year and the signs aren’t looking favorable for a sustained recovery in the currency any time soon. The Australian dollar traded at US74.33¢ on Monday, with the currency lifted by Friday’s well-received US payrolls data, which weighed down the greenback. Overall, AUD/USD traded with a low of 0.7460 and a high of 0.7466 before closing the day at 0.7460 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 59 and lies above the neutral zone. In general, the pair has gained 0.43%.
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 54 reading and lies above the neutral zone. On the whole, the pair has gained 0.17%.
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 55 reading and lies above the neutral region. In general, the pair has gained 0.81%.
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 59 and lies above the neutral region. On the whole, the pair has gained 0.22%.
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 46 and lies below the neutral region. In general, the pair has lost 0.12%.
|FOREX Closing Prices for July 09, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.