12 Окт 2018

FOREX Newsletter

FOREX Newsletter

October 12, 2018

 

Pulse of the Market

·      The Labor Department said yesterday that U.S consumer price index rose 0.1% last month

·      The rout in global markets did little to lift demand for the safe-haven yen against the greenback

·      The Italian Senate approved the motion to push back the balanced budget from 2020 to beyond 2021

·      Pound gained as traders awaited a possible breakthrough in Brexit-deal negotiations

 

The U.S Dollar slumped against its rivals yesterday after data showed U.S inflation undershot economists’ expectations. The U.S dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.42% to 94.82. The Labor Department said on Thursday its consumer price index rose 0.1% last month, and 2.3% for the year through September, missing economists’ forecasts for a 2.4% rise. Inflation continues to underwhelm the Fed, but is unlikely to deter the pace of gradual rate hikes ahead. The greenback was also kept in check by a stronger euro, though analysts warned the single currency has limited room for upside amid contagion risks from Italy. The Italian Senate approved the motion to push back the balanced budget from 2020 to beyond 2021 after it introduced a higher-than-expected budget deficit target at 2.4%, raising the risk of backlash from Brussels. Some fear that a rift between Italy and bloc could see the country exit the European Union, but there’s little risk of an Italy. The Euro and British Pound extended yesterday’s advance as regional investors took their turn to react to firming hopes for an imminent Brexit deal. The anti-risk Japanese Yen remained well-supported as APAC bourses sank, picking up on a dismal lead from Wall Street. Meanwhile, commodity bloc currencies cautiously retraced earlier losses. The Yen as well as the Swiss Franc – a frequent beneficiary of regional haven demand – appear well-positioned to benefit. The Canadian Dollar appeared to stabilize yesterday amid a rout in financial markets that has forced the U.S greenback onto its back foot, although analysts at Scotiabank are saying the outlook for the Loonie has deteriorated of late. Scotiabank’s call comes on a day when the greenback is in retreat following a rout in bond prices that spooked stock markets across the globe, leading the carnage to spill over into currency markets. This has provided breathing space to the Loonie by stemming an earlier decline that had seen the USD/CAD rate cross over a key technical level, which some saw as likely to encourage further losses.  The Australian dollar traded sharply higher against all major currencies yesterday, almost reversing all the losses made on Wednesday. Despite the ongoing turmoil across global equity markets, the Australian dollar rebounded yesterday. Given Australia’s significant trading relationship with China, the aussie typically trades in line with developments in Chinese financial markets. For now, the currency is rallying despite significant weakness in most Chinese markets.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 Australia Home Loans (MoM) (AUG) Medium   -1.0% 0.4%
04:30 Japan Tertiary Industry Index (MoM) (AUG) Medium   0.3% 0.1%
06:00 German Consumer Price Index (YoY) (SEP) Medium   2.3% 2.3%
09:00 Euro-Zone Industrial Production w.d.a. (YoY) (AUG) Medium   -0.3% -0.1%
12:30 Canada Teranet/National Bank HPI (YoY) (SEP) Low     1.4%
12:30 U.S Import Price Index ex Petroleum (MoM) (SEP) Medium   -0.1% -0.2%
12:30 U.S Import Price Index (YoY) (SEP) Low   3.1% 3.7%
12:30 U.S Export Price Index (YoY) (SEP) Medium     3.6%

 

Euro

The single currency rose sharply yesterday as the U.S Dollar continues to fall as U.S bond yields hovered at multiyear peaks. The bounce in the Euro offset the effects of an increase in U.S Treasury yields, putting pressure on the dollar. U.S. yields have increased on rising government debt supply and worries about higher inflation. Overall, the EUR/USD traded with a low of 1.1519 and a high of 1.1598 before closing the day around 1.1591 in the New York session.

 

Yen

The Japanese Yen pair fell to a near two-week low yesterday. The US dollar, usually seen as a safe haven in turbulent times, surprised some currency strategists on Thursday by losing ground after spooked investors drove US stocks to their worst fall in nearly eight months. The yen continues to show its colors as the markets favorite risk haven proxy. Overall, the USD/JPY traded with a low of 111.81 and a high of 112.51 before closing the day around 112.14 in the U.S session.

 

British Pound

The British Pound hovered near multi-day highs against the Dollar and multi-week highs against the Euro as markets continue to price in the prospect of a Brexit Withdrawal Agreement being agreed in coming days. The U.K and the E.U could agree the terms of their Brexit divorce by as early as Monday reports the Dow Jones newswire. Overall, the GBP/USD traded with a low of 1.3180 and a high of 1.3246 before closing the day at 1.3233 in the New York session.

 

Canadian Dollar

The Canadian Dollar rose against its broadly weaker U.S counterpart, recovering from an earlier 12-day low as data showing a slowdown in U.S. inflation weighed on the yields of U.S government bonds. Treasury yields extended their fall as the inflation data dented expectations of a more aggressive pace in raising interest rates by the U.S. Federal Reserve. Overall, USD/CAD traded with a low of 1.3012 and a high of 1.3069 before closing the day at 1.3030 in the New York session.

 

Australian Dollar

The Australian Dollar traded higher against all major currencies yesterday. On Wednesday, the Australian dollar fell sharply against the US dollar. Notably, the currency found buyers at the bottom-end of its trading range. While trading volumes in Australian dollar futures accelerated relative to the previous session, the pair failed to make a new low. Overall, AUD/USD traded with a low of 0.7044 and a high of 0.7127 before closing the day at 0.7409 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 44 and lies below the neutral zone. In general, the pair has gained 0.55%.

 

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 57 reading and lies above the neutral zone. On the whole, the pair has gained 0.25%.

 

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 40 reading and lies below the neutral region. In general, the pair has gained 0.90%.

 

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 32 and lies below the neutral region. On the whole, the pair has gained 0.32%.

  

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 71 and lies above the neutral region. In general, the pair has gained 0.24%.

 

Appendix

  

FOREX Closing Prices for October 10, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15228 1.1598 1.15192 1.15918 0.0074
USD/JPY 112.249 112.515 111.812 112.147 -0.1090
GBP/USD 1.31952 1.3246 1.31802 1.32335 0.0045
USD/CHF 0.98986 0.99206 0.98549 0.98926 -0.0008
USD/CAD 1.30558 1.30694 1.30128 1.30307 -0.0034
EUR/JPY 129.341 130.191 129.187 130.012 0.7130
GBP/JPY 148.119 148.756 147.791 148.424 0.3650
CHF/JPY 113.369 113.816 113.044 113.33 -0.0210
AUD/JPY 79.102 80.12 79.015 79.863 0.7140
EUR/GBP 0.87281 0.87715 0.87268 0.87585 0.0028
EUR/CHF 1.14063 1.14869 1.13895 1.14682 0.0064
GBP/CHF 1.30619 1.31021 1.3028 1.30903 0.0031

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1463 1.1491 1.1541 1.1570 1.1620 1.1648 1.1699
USD/JPY 111.10 111.46 111.80 112.16 112.50 112.86 113.21
GBP/USD 1.3128 1.3154 1.3194 1.3220 1.3260 1.3286 1.3325
USD/CHF 0.9792 0.9824 0.9858 0.9889 0.9924 0.9955 0.9990
USD/CAD 1.2949 1.2981 1.3006 1.3038 1.3062 1.3094 1.3119
EUR/JPY 128.40 128.79 129.40 129.80 130.41 130.80 131.41
GBP/JPY 146.93 147.36 147.89 148.32 148.86 149.29 149.82
CHF/JPY 112.21 112.62 112.98 113.40 113.75 114.17 114.52
AUD/JPY 78.11 78.56 79.21 79.67 80.32 80.77 81.42
EUR/GBP 0.8688 0.8708 0.8733 0.8752 0.8778 0.8797 0.8822
EUR/CHF 1.1312 1.1351 1.1410 1.1448 1.1507 1.1546 1.1604
GBP/CHF 1.2971 1.2999 1.3045 1.3073 1.3119 1.3148 1.3193

 

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

 

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