July 23, 2018
Pulse of the Market
· The Dollar fell against a basket of the other major currencies on Friday, snapping a four day rally
· The British Pound traded higher on Friday, with GBP/USD adding on 0.89% to trade at 1.3129
· This week, investors will focus how the U.S economy performed in the second quarter
· U.S President indicated Friday that he is prepared to slap tariffs on all Chinese imports to the U.S
|The U.S Dollar fell on Friday after U.S. President Donald Trump criticized the Federal Reserve for increasing interest rates but was still on target for a second week of gains. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.15% to 94.84. Despite the dip, the dollar was on target for a second straight week of gains and has risen more than 5% in the last three months due to expectations that interest rates will rise. Trump said in an interview on CNBC that he does not approve of how the Fed is approaching monetary policy. The Fed raised rates twice this year and is expected to raise rates at least once more before the end of the year. “I’m not thrilled,” Trump said. “Because we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time I’m letting them do what they feel is best.” Meanwhile trade tensions continued, with the European Union expected to retaliate against the U.S. with more tariffs after America imposed tariffs on steel and aluminum in June. Tariffs on around $3.8 billion of U.S. goods have already been imposed by Europe. The dollar was lower against the safe-haven yen, with USD/JPY decreasing 0.06% to 112.39. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. This week, investors will have a chance to see how the U.S economy performed in the second quarter. Friday’s GDP report is expected to show that the economy rebounded in the three months to June, boosted by an increase in consumer spending. Markets will also get an update on the health of the housing market, with reports due out on existing and new home sales. In Europe, monetary policy will be in focus, with the European Central Bank expected to leave rates on hold at its meeting on Thursday, following policy changes at its last meeting. Investors will also be monitoring developments in the intensifying global trade conflict, which has roiled markets. U.S. President Donald Trump indicated Friday that he is prepared to slap tariffs on all Chinese imports to the U.S., worth around $500 billion per year. Trump made the threat in a pre-recorded interview with CNBC that aired on Friday.
|01:10||BOJ Outright Bond Purchase 3~5 Years||Low|
|07:00||Switzerland Money Supply M3 (YoY) (JUN)||Low||2.9%|
|08:00||Switzerland Total Sight Deposits CHF (JUL 20)||Low|
|12:30||Canada Wholesale Trade Sales (MoM) (MAY)||Low||0.1%|
|12:30||U.S Chicago Fed Nat Activity Index (JUN)||Low||-0.15|
|13:00||Mexico Economic Activity IGAE (YoY) (MAY)||Medium||4.53%|
|14:00||Euro-Zone Consumer Confidence (JUL)||Medium||-0.5|
|14:00||U.S Existing Home Sales (MoM) (JUN)||Medium||-0.2%||-0.4%|
|15:30||U.S. to sell 3-Month Bills||Low|
|15:30||U.S. to sell 6-Month Bills||Low|
|23:30||ANZ Roy Morgan Weekly Consumer Confidence Index (JUL 22)||Low|
The single currency has been treading water. It is unlikely to find a rescuing hand from the ECB, whose policymakers met last week. While analysts expect the shared currency to strengthen as the year progresses, the conviction in that view is shaky, with strategists having pared their calls recently. The euro has weakened about 2.5 per cent so far this year. Overall, the EUR/USD traded with a low of 1.1624 and a high of 1.1737 before closing the day around 1.1719 in the New York session.
The Japanese Yen pair retreated further from the multi-month high of 113.17 and finished the week in the red at 111.42, amid broad dollar’s weakness following comments from US President Trump. Comments from Fed’s Bullard added to the pair’s decline, as he said that the Fed should hold off on hiking further. Overall, the USD/JPY traded with a low of 111.38 and a high of 112.60 before closing the day around 111.45 in the U.S session.
The British Pound came off recent multi-month lows against the Dollar following the closing of Brexit-related talks in Brussels. Granted, the 0.60% advance in GBP/USD flatters the picture somewhat as the move is largely a function of Dollar weakness in the wake of some punchy comments on the Dollar’s ongoing ascent from President Donald Trump. Overall, the GBP/USD traded with a low of 1.2993 and a high of 1.3138 before closing the day at 1.3134 in the New York session.
The Canadian Dollar rose against a broadly weak U.S. dollar on Friday after strong inflation and retail sales data reinforced expectations for another interest rate hike by the Bank of Canada this year. The loonie posted its largest one-day gain versus the U.S. dollar in three weeks.. Canada’s annual inflation rose last month to its highest level in more than six years. Overall, USD/CAD traded with a low of 1.3112 and a high of 1.3287 before closing the day at 1.3131 in the New York session.
The Australian Dollar gained sharply in Friday’s trading session as the U.S Dollar held below a one-year high on Friday after U.S President Donald Trump expressed concern about a stronger currency, although a weakening Chinese Yuan reduced risk appetite. Trump said a strong dollar puts the United States at a disadvantage. Overall, AUD/USD traded with a low of 0.7316 and a high of 0.7429 before closing the day at 0.7421 in the New York session.
EUR/JPY is trading above 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 56 and lies above the neutral zone. In general, the pair has lost 0.22%.
Currently, GBP/JPY is trading above 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 45 reading and lies below the neutral zone. On the whole, the pair has gained 0.04%.
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 51 reading and lies above the neutral region. In general, the pair has gained 0.03%.
This cross is currently trading above 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 63 and lies above the neutral region. On the whole, the pair has lost 0.27%.
This cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 39 and lies below the neutral region. In general, the pair has gained 0.25%.
|FOREX Closing Prices for July 20, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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