16 Окт 2018

FOREX Newsletter

FOREX Newsletter

October 16, 2018

 

Pulse of the Market

·      The U.S Dollar dipped yesterday after retail sales data for September missed expectations

·      U.S retail sales barely rose in September as a rebound in motor vehicle purchases

·      Safe haven Japanese yen and the Swiss franc gained yesterday as European stocks tumbled

·      The Canadian Dollar strengthened to its highest in five days against its U.S counterpart

The U.S Dollar fell in yesterday’s trading session after retail sales data for September missed economists’ expectations, and as benchmark U.S Treasury yields consolidated after last week hitting their highest level in seven years. U.S. retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years. Retail sales edged up only 0.1 percent in the month. Economists polled by Reuters had forecast an increase of 0.6 percent. We had softer than expected retail sales that was another leg of dollar selling. It comes after data last week showed that U.S. consumer prices rose less than expected in September, held back by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool. Higher 10-year Treasury yields, which on Tuesday shot to 3.26 percent, helped to boost the greenback last week. With yields now having retraced to 3.15 percent, investors are looking for fresh impetus for dollar buying. Safe haven currencies the Japanese yen and the Swiss franc gained on Monday as European stocks tumbled to 22-month lows, with rising tensions between Western powers and Saudi Arabia adding to a cocktail of concerns that battered global stocks last week. Saudi Arabia has been under pressure since a prominent Saudi journalist Jamal Khashoggi, a critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul. Chancellor Angela Merkel’s Bavarian sister party also said on Monday it would back political stability in Berlin after suffering big losses in a regional election which their far-right foes hailed as “an earthquake” that would rock the coalition government. The Japanese Yen hit a one-month high and the Swiss franc rallied yesterday as rising geopolitical tension and further falls in equity markets left investors skittish at the start of the week. Canadian Dollar gained yesterday as Canadian business sentiment remains at elevated levels, with companies expecting to ramp up investment to build new capacity and accommodate demand. The central bank has hiked interest rates four times since July 2017 to leave its policy rate at 1.50 per cent.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 RBA Meeting Minutes (OCT 2) Medium      
01:30 China Producer Price Index (YoY) (SEP) Medium   3.6% 4.1%
01:30 China Consumer Price Index (YoY) (SEP) High   2.5% 2.3%
08:30 U.K Claimant Count Rate (SEP) Medium     2.6%
08:30 U.K Jobless Claims Change (SEP) Medium     8.7k
09:00 German ZEW Survey Current Situation (OCT) Medium   74.4 76
09:00 German ZEW Survey Expectations (OCT) High   -12 -10.6
09:00 Euro-Zone ZEW Survey (Economic Sentiment) (OCT) High     -7.2
13:15 U.S Industrial Production (MoM) (SEP) Medium   0.2% 0.4%
13:15 U.S Manufacturing (SIC) Production (SEP) Medium   0.2% 0.2%
14:00 U.S NAHB Housing Market Index (OCT) Medium   67 67
20:00 U.S Net Long-term TIC Flows (AUG) Medium     $74.8b

 

Euro

The single currency was higher in yesterday’s trading session. On the release front, there were no Eurozone events. In the U.S, the focus was on retail sales reports. The week ended on a high note, with solid inflation numbers in Germany. Inflation climbed 2.3% in September on a year-to-year basis, its strongest gain since November 2011. Overall, the EUR/USD traded with a low of 1.1541 and a high of 1.1604 before closing the day around 1.1577 in the New York session.

 

Yen

The Japanese Yen hit a one-month high as rising geopolitical tension and investor anxiety about the global economy left investors skittish at the start of the week. Equity markets fell on worries the ongoing U.S trade dispute is hitting China’s economy. Analysts expect the yen to strengthen as a downturn in equities catalyzes safe-haven demand for the yen. Overall, the USD/JPY traded with a low of 111.60 and a high of 112.21 before closing the day around 111.75 in the U.S session.

 

British Pound

The British Pound capped losses following a weekend of fruitless Brexit talks on conviction that the U.K. and the European Union would eventually reach a deal to avoid a chaotic divorce. The risks to any bullish sterling views include leaders not agreeing on the Brexit divorce terms. Both the U.K. and the EU have stepped up contingency planning in case negotiations fail. Overall, the GBP/USD traded with a low of 1.3094 and a high of 1.3179 before closing the day at 1.3150 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened to its highest in five days against its U.S counterpart yesterday, after a quarterly business survey by the Bank of Canada supported bets for another interest rate hike from the central bank as soon as next week. Canadian business optimism remained at near-record levels in the third quarter. Overall, USD/CAD traded with a low of 1.2952 and a high of 1.3049 before closing the day at 1.2987 in the New York session.

 

Australian Dollar

The Australian Dollar strengthened against all major currencies except the Japanese yen. Last week, the Australian dollar ended the week higher against the US dollar after rebounding from the bottom-end of its trading range. Notably, week-over-week trading volumes in Australian dollar futures accelerated for the third week in a row.  Overall, AUD/USD traded with a low of 0.7097 and a high of 0.7147 before closing the day at 0.7138 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 0.20%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14 and above 50, 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 49 reading and lies below the neutral zone. On the whole, the pair has lost 0.38%.

 

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 41 reading and lies below the neutral region. In general, the pair has lost 0.13%.

 

Euro-Sterling

This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is issuing a bearish signal. The Relative Strength Index is above 42 and lies below the neutral region. On the whole, the pair has gained 0.18%.

  

Sterling-Swiss

This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 61 and lies above the neutral region. In general, the pair has lost 0.50%.

 

Appendix

  

FOREX Closing Prices for October 15, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15494 1.16047 1.15416 1.15779 0.0021
USD/JPY 112.141 112.217 111.606 111.75 -0.4210
GBP/USD 1.30978 1.31799 1.30941 1.31508 -0.0001
USD/CHF 0.99132 0.99166 0.98461 0.98693 -0.0048
USD/CAD 1.30225 1.3049 1.29527 1.29872 -0.0041
EUR/JPY 129.53 129.775 129.102 129.394 -0.2620
GBP/JPY 146.899 147.403 146.481 146.974 -0.5660
CHF/JPY 113.091 113.481 112.741 113.214 0.1370
AUD/JPY 79.7 79.937 79.448 79.668 -0.1050
EUR/GBP 0.88156 0.88239 0.87938 0.88015 0.0016
EUR/CHF 1.14502 1.14621 1.14125 1.14262 -0.0036
GBP/CHF 1.29856 1.30016 1.29436 1.29791 -0.0065

  

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1482 1.1512 1.1545 1.1575 1.1608 1.1638 1.1671
USD/JPY 110.89 111.25 111.50 111.86 112.11 112.47 112.72
GBP/USD 1.3018 1.3056 1.3103 1.3142 1.3189 1.3227 1.3275
USD/CHF 0.9768 0.9807 0.9838 0.9877 0.9909 0.9948 0.9979
USD/CAD 1.2847 1.2900 1.2944 1.2996 1.3040 1.3093 1.3136
EUR/JPY 128.40 128.75 129.07 129.42 129.75 130.10 130.42
GBP/JPY 145.58 146.03 146.50 146.95 147.42 147.87 148.35
CHF/JPY 112.07 112.41 112.81 113.15 113.55 113.89 114.29
AUD/JPY 78.94 79.20 79.43 79.68 79.92 80.17 80.41
EUR/GBP 0.8759 0.8776 0.8789 0.8806 0.8819 0.8837 0.8849
EUR/CHF 1.1356 1.1384 1.1405 1.1434 1.1455 1.1483 1.1504
GBP/CHF 1.2890 1.2917 1.2948 1.2975 1.3006 1.3033 1.3064

 

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

 

Disclaimer

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.