11 Окт 2018

FOREX Newsletter

FOREX Newsletter

October 11, 2018

 

Pulse of the Market

·      A recent increase in bond yields has been driven this week by positive data

·      the euro was higher due to the fall in the greenback, recovering from a selloff

·      The pound was higher, amid reports that 80% of the treaty between the UK and the EU is done

·      The Canadian Dollar weakened to a 10-day low against its U.S. counterpart

The U.S Dollar was lower yesterday, amid fears that the Federal Reserve will increase interest rates higher than expected. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slumped 0.21% to 95.16. A recent increase in bond yields has been driven this week by positive data that showed the Fed will increase rates in December and beyond. The yield on the benchmark United States 10-year note rose to 3.214% after reaching a seven-year high of 3.261% the day before, while the United States 30-Year Treasury bond was at 3.384%, not far from a four-year peak of 3.44%. Meanwhile, the euro was higher due to the fall in the greenback, recovering from a selloff as Italy’s populist government and the European Commission went head-to-head over the country’s budget. Brussels and Rome have been at odds over the country’s budget deficit plans for the next three years, which breach EC rules on running excessive deficits and high debt. The pound was higher, amid reports that 80% of the treaty between the UK and the European Union is done. GBP/USD rose 0.41% to 1.3197. The dollar slid lower against the yen, with USD/JPY down 0.26% to 112.66. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. The Canadian dollar weakened on Wednesday to a 10-day low against its U.S. counterpart, underperforming other G10 currencies, as the price of oil, one of Canada’s major exports, slumped. The loonie touched its weakest since Sept. 28 at 1.3046. U.S. crude oil futures settled 2.4 per cent lower as U.S. equity markets broadly fell, even though energy traders worried about shrinking supply from Iran due to U.S. sanctions and also kept an eye on Hurricane Michael, which closed nearly 40 per cent of U.S. Gulf of Mexico oil output. The modest rebound in the Australian dollar came to a shuddering halt yesterday, falling heavily as global investor risk sentiment took a turn for the worst. After drifting to as high as .7130 in Asian trade on the back a modest improvement in investor sentiment, the AUD/USD began to fall in European trade with losses accelerating as North American markets opened. More firm US economic data, and hawkish commentary from US Fed officials kept US bond yields at or near multi-year highs, adding to concern that the current pace of Fed tightening was likely to continue in the period ahead.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 Australia Consumer Inflation Expectation (OCT) Medium     4.0%
08:30 Bank of England Credit Conditions & Bank Liabilities Surveys High      
12:30 Canada New Housing Price Index (YoY) (AUG) Medium   0.5% 0.5%
12:30 U.S Consumer Price Index (YoY) (SEP) High   2.4% 2.7%
12:30 U.S Consumer Price Index Ex Food and Energy (YoY) (SEP) High   2.3% 2.2%
12:30 U.S Real Avg. Weekly Earnings (YoY) (SEP) Medium     0.5%
12:30 U.S Real Avg. Hourly Earning (YoY) (SEP) Medium     0.2%
12:30 U.S Initial Jobless Claims (OCT 6) Medium   210k 207k
12:30 U.S Continuing Claims (SEP 29) Medium     1650k
15:00 DOE U.S Crude Oil Inventories (OCT 5) Medium     7975k

 

Euro

The single currency gained yesterday, moving away from seven-week lows after a fall in U.S Treasury yields took some steam out of the U.S Dollar’s recent run. The rally in the U.S Dollar was paused yesterday in European trading session, although analysts said it was likely to prove a temporary reprieve for the euro.  Overall, the EUR/USD traded with a low of 1.1478 and a high of 1.1544 before closing the day around 1.1518 in the New York session.

 

Yen

The Japanese Yen pair was back under pressure, with the exchange rate slipping to a fresh monthly-low of 112.76. USD/JPY struggles to hold its ground despite the limited reaction to the U.S Producer Price Index (PPI), which showed the headline reading slipping to 2.6% from 2.8% per annum in August but the broader outlook for dollar-yen remains supportive. Overall, the USD/JPY traded with a low of 112.23 and a high of 113.26 before closing the day around 112.25 in the U.S session.

 

British Pound

The British Pound continued its decent rally started on Tuesday despite data published by the Office for National Statistics (ONS), the UK economy displayed no signs of growth in August, missing expectations of a modest 0.1 per cent expansion. The report revealed Britain’s builders were hit particularly hard. Overall, the GBP/USD traded with a low of 1.3134 and a high of 1.3213 before closing the day at 1.3188 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged lower against its U.S counterpart as oil prices fell and U.S Treasury yields climbed toward multi-year peaks. Investors were worried that higher bond yields and trade conflicts could hurt global economic growth. On Tuesday, the IMF cut its world gross domestic product forecasts for the first time in two years. Overall, USD/CAD traded with a low of 1.2924 and a high of 1.3066 before closing the day at 1.3065 in the New York session.

 

Australian Dollar

The Australian Dollar struggles to benefit from improved consumer confidence. A modest rebound in October’s Westpac consumer confidence index offered limited support to the Australian Dollar (AUD), with the improvement failing to reverse the previous month’s slump. Confidence in the underlying health of the Australian economy remains limited. Overall, AUD/USD traded with a low of 0.7052 and a high of 0.7101 before closing the day at 0.7100 in the New York session.

 

Euro-Yen

EUR/JPY is trading below 14 and above 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 43 and lies below the neutral zone. In general, the pair has lost 0.37%.

 

Sterling-Yen

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 59 reading and lies above the neutral zone. On the whole, the pair has lost 0.26%.

  

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 37 reading and lies below the neutral region. In general, the pair has lost 1.30%.

 

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 26 and lies below the neutral region. On the whole, the pair has lost 0.12%.

 

Sterling-Swiss

This cross is trading above 14, 50 and below 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 72 and lies above the neutral region. In general, the pair has gained 0.18%.

 

Appendix

  

FOREX Closing Prices for October 09, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.14889 1.1544 1.14784 1.1518 0.0029
USD/JPY 112.968 113.268 112.238 112.256 -0.6820
GBP/USD 1.31383 1.32139 1.31349 1.31885 0.0047
USD/CHF 0.99191 0.99323 0.98938 0.99004 -0.0017
USD/CAD 1.29459 1.30667 1.29243 1.3065 0.0121
EUR/JPY 129.797 130.477 129.274 129.299 -0.4780
GBP/JPY 148.418 149.279 148.034 148.059 -0.3790
CHF/JPY 113.857 114.195 113.329 113.351 -0.4910
AUD/JPY 80.193 80.563 79.056 79.149 -1.0450
EUR/GBP 0.8744 0.8749 0.87213 0.87307 -0.0011
EUR/CHF 1.13985 1.14417 1.13875 1.14039 0.0007
GBP/CHF 1.3034 1.31069 1.30269 1.30592 0.0024

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1417 1.1448 1.1483 1.1513 1.1549 1.1579 1.1614
USD/JPY 110.88 111.56 111.91 112.59 112.94 113.62 113.97
GBP/USD 1.3065 1.3100 1.3144 1.3179 1.3223 1.3258 1.3302
USD/CHF 0.9847 0.9870 0.9885 0.9909 0.9924 0.9947 0.9962
USD/CAD 1.2828 1.2876 1.2971 1.3019 1.3113 1.3161 1.3255
EUR/JPY 127.69 128.48 128.89 129.68 130.09 130.89 131.30
GBP/JPY 146.39 147.21 147.64 148.46 148.88 149.70 150.13
CHF/JPY 112.19 112.76 113.06 113.63 113.92 114.49 114.79
AUD/JPY 77.11 78.08 78.62 79.59 80.12 81.10 81.63
EUR/GBP 0.8691 0.8706 0.8718 0.8734 0.8746 0.8761 0.8774
EUR/CHF 1.1326 1.1357 1.1380 1.1411 1.1435 1.1465 1.1489
GBP/CHF 1.2942 1.2984 1.3022 1.3064 1.3102 1.3144 1.3182

 

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

 

Disclaimer

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