17 Окт 2018

FOREX Newsletter

FOREX Newsletter

 October 17, 2018

 

  Pulse of the Market

·      The Greenback remained under pressure yesterday despite upbeat jobs data

·      U.S job openings rose to 7.14 million according to the Labor Department’s monthly JOLTs report

·      Data showed wage growth in the UK rose at its fastest pace in 10 years in August

·      The Single Currency pushed higher yesterday but gains were held in check

 

The Dollar was off its lows against its rivals yesterday on upbeat U.S labor market data and a weaker yen, amid waning safe-haven demand as Wall Street rallied. The U.S dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.04% to 94.73. The U.S. Labor Department’s latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in August improved to about 7.136 million, beating expectations of 6.945 million. The rising number of openings comes as the unemployment rate fell to its lowest level in 49 years in September, reaffirming investor expectations that the U.S. labor market remained strong. The dollar’s charge higher, however, was stifled by ongoing strength in the pound following upbeat UK wage data. EUR/USD rose 0.04% to $1.1586, as analysts warned that the European Union and Italy are headed for a “messy clash” over the country’s plans to stick to its 2019 budget deficit at 2.4% of GDP. There is little to suggest that Italy’s government will relent on its budget proposals. This makes a messy clash almost inevitable now. Downside in the dollar was limited, however, by reduced demand for safe-haven yen as a slew of corporate earnings whetted investor appetite for risk. Investor sentiment towards the British Pound brightened yesterday following news that wage growth in the UK accelerated at the fastest pace in almost a decade. According to official reports published by the Office of National Statistics, average earnings jumped by 3.1% in the three months to August while total pay including bonuses rose by 2.7% during the quarter. Attraction towards the Pound was also boosted by the unemployment rate, which remained steady at 4% – the lowest level in 43 years. Although yesterday’s labor figures point to signs of inflationary pressures and reinforce expectations over the BoE raising interest rates gradually over the coming years, the main focus revolves around Brexit. Uncertainty over Brexit negotiations remains the biggest drag on the British Pound and is likely to cap any meaningful upside gains created by positive economic fundamentals. Sterling could be in store for a world of pain if no real progress is made on Brexit at today’s EU summit in Brussels.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
08:30 U.K Consumer Price Index (YoY) (SEP) High   2.6% 2.7%
08:30 U.K Core Consumer Price Index (YoY) (SEP) High   2.0% 2.1%
08:30 U.K Retail Price Index (YoY) (SEP) Low   3.5% 3.5%
08:30 U.K House Price Index (YoY) (AUG) Medium   2.8% 3.1%
08:30 BOE’s FPC Minutes (OCT 3) Medium      
09:00 Euro-Zone Consumer Price Index (YoY) (SEP) Medium   2.1% 2.0%
12:30 U.S Housing Starts (MoM) (SEP) Medium   -5.6% 9.2%
12:30 U.S Building Permits (MoM) (SEP) Medium   2.1% -5.7%
14:30 DOE U.S. Crude Oil Inventories (OCT 12) Medium     5987k
18:00 U.S FOMC Meeting Minutes (SEP 26) High      
23:50 Japan Trade Balance (SEP) Medium   -¥43.3b -¥444.6b

 

Euro

The single currency gave back yesterday’s earlier gains to end the session almost unchanged. The euro zone’s trade surplus with the rest of the world, unadjusted for seasonal swings, shrank in August to 11.7 billion euros ($13.6 billion) from 15.3 billion a year earlier, but the adjusted number increased to 16.6 billion, Eurostat data showed yesterday. Overall, the EUR/USD traded with a low of 1.1564 and a high of 1.1620 before closing the day around 1.1572 in the New York session.

 

Yen

The Japanese Yen weakened yesterday, pulling back further from recent highs touched amid a global equities rout. The Japanese currency, favored as a haven by investors during bouts of market uncertainty, was off 0.2 per cent at ¥112, as it moved off a four-week high. Major currencies have been under pressure almost across the board. Overall, the USD/JPY traded with a low of 111.71 and a high of 112.31 before closing the day around 112.23 in the U.S session.

 

British Pound

The British Pound extended gains in yesterday’s session. Investor sentiment towards the British Pound brightened yesterday following news that wage growth in the UK accelerated at the fastest pace in almost a decade. According to official reports published by the Office of National Statistics, average earnings jumped by 3.1% in the three months to August. Overall, the GBP/USD traded with a low of 1.3139 and a high of 1.3234 before closing the day at 1.3184 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened to nearly a one-week high against the greenback yesterday, boosted by a rise in stocks and growing expectations of a Bank of Canada interest rate hike next week. Stocks gained as upbeat earnings reports helped ease jitters over the impact of various global issues, including tariffs, on corporate profits. Overall, USD/CAD traded with a low of 1.2913 and a high of 1.2996 before closing the day at 1.2931 in the New York session.

 

Australian Dollar

The Australian Dollar has made limited movement against the US Dollar following the release of the latest RBA minutes. Covering the RBA’s meeting from earlier in October, the minutes have revealed a still-cautious outlook among policymakers. While RBA officials are still planning to raise interest rates when they make the next adjustment. Overall, AUD/USD traded with a low of 0.7110 and a high of 0.7149 before closing the day at 0.7139 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 45 and lies below the neutral zone. In general, the pair has gained 0.39%.

  

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 53 reading and lies above the neutral zone. On the whole, the pair has gained 0.70%.

  

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 44 reading and lies below the neutral region. In general, the pair has gained 0.58%.

 

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 38 and lies below the neutral region. On the whole, the pair has lost 0.31%.

  

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 64 and lies above the neutral region. In general, the pair has gained 0.61%.

 

Appendix

  

FOREX Closing Prices for October 16, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.15777 1.16201 1.15646 1.15729 -0.0005
USD/JPY 111.754 112.319 111.714 112.234 0.4840
GBP/USD 1.31513 1.32345 1.3139 1.31843 0.0033
USD/CHF 0.98686 0.99073 0.98572 0.99047 0.0035
USD/CAD 1.29893 1.29967 1.29139 1.29318 -0.0055
EUR/JPY 129.404 130.273 129.403 129.898 0.5040
GBP/JPY 146.997 148.38 146.897 147.998 1.0240
CHF/JPY 113.203 113.675 113.095 113.282 0.0680
AUD/JPY 79.66 80.179 79.658 80.13 0.4620
EUR/GBP 0.88006 0.88088 0.87507 0.87745 -0.0027
EUR/CHF 1.14273 1.14763 1.14273 1.14639 0.0038
GBP/CHF 1.29814 1.30836 1.29709 1.30587 0.0080

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1496 1.1530 1.1552 1.1586 1.1607 1.1641 1.1663
USD/JPY 111.25 111.48 111.86 112.09 112.46 112.69 113.07
GBP/USD 1.3042 1.3090 1.3137 1.3186 1.3233 1.3281 1.3328
USD/CHF 0.9822 0.9840 0.9872 0.9890 0.9922 0.9940 0.9972
USD/CAD 1.2815 1.2865 1.2898 1.2947 1.2981 1.3030 1.3064
EUR/JPY 128.57 128.99 129.44 129.86 130.31 130.73 131.18
GBP/JPY 145.65 146.28 147.14 147.76 148.62 149.24 150.10
CHF/JPY 112.45 112.77 113.03 113.35 113.61 113.93 114.19
AUD/JPY 79.28 79.47 79.80 79.99 80.32 80.51 80.84
EUR/GBP 0.8689 0.8720 0.8747 0.8778 0.8805 0.8836 0.8863
EUR/CHF 1.1386 1.1407 1.1435 1.1456 1.1484 1.1505 1.1533
GBP/CHF 1.2879 1.2925 1.2992 1.3038 1.3105 1.3150 1.3217

 

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.