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.
|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|
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.
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.
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.
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.
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.
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%.
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%.
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%.
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%.
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%.
|FOREX Closing Prices for October 16, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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