19 Окт 2018

FOREX Newsletter

FOREX Newsletter

October 19, 2018

 

Pulse of the Market

·      Chances of a Fed rate hike at its meeting in December were priced in at 83.4%

·      Data showed that Japanese exports fell for the first time since 2016 in September

·      The pound was lower as UK Prime Minister Theresa May faced political tension from her party

·      The Canadian dollar drifted lower in yesterday’s session as oil prices slipped

The U.S dollar was higher yesterday as bond yields rose and minutes from the Federal Reserve’s September meeting supported a rate increase in December. The U.S. dollar index, which tracks the greenback against a basket of other currencies, rose 0.13% to 95.47. Treasury yields were higher on Thursday, with the United States 10-Year note near a one-week high of 3.211% and the 2-year note at a 10-year high. The rise in bond yields came after hawkish Fed minutes showed the central bank’s conviction in gradually increasing interest rates in December and beyond. Chances of a Fed rate hike at its meeting in December were priced in at 83.4%, according to Fed Rate Monitor Tool. The dollar rose against the yen, with USD/JPY decreasing 0.12% to 112.53. Data overnight showed that Japanese exports fell for the first time since 2016 in September, adding to concerns over the impact of the U.S.-China trade war on global growth. Italy’s bonds plunged Thursday just hours after the Treasury successfully conducted a debt-exchange operation as the European Union’s executive body dispatched a letter to the nation’s government and investors sharpened their focus on budget concerns. The euro also fell. The pound has dipped as worries escalate regarding Brexit negotiations reaching a deadlock. Sterling was also negatively impacted by UK retail sales data which showed a decline in consumer spending. Experts caution that the exchange rate could stay “on the back foot” over the weekend. The Office for National Statistics (ONS) has revealed UK retail sales growth contracted 0.8 per cent last month. This decline in sales growth was notably larger than the 0.4 per cent contraction that had been forecast by economists and appeared mostly driven by a sharp fall in food sales. The Canadian dollar drifted lower against its key counterparts yesterday, as oil prices slipped on demand worries following an overnight data showing a large build in US crude inventories last week. Data from the US Energy Information Administration showed that US crude oil inventories rose by 6.5 million barrels last week. That marked the fourth straight weekly build and was almost triple what analysts had forecast. In the previous week ending Oct. 5 also, there was a large build of 6.0 million barrels.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
02:00 China Surveyed Jobless Rate (SEP) Medium 4.9% 5.0%
02:00 China Gross Domestic Product (YoY) (3Q) High 6.5% 6.6% 6.7%
02:00 China Retail Sales (YoY) (SEP) Medium 9.2% 9.0% 9.0%
02:00 China Industrial Production (YoY) (SEP) Medium 5.8% 6.0% 6.1%
06:35 BOJ Kuroda speaks in Tokyo High
08:30 U.K Public Sector Net Borrowing (SEP) Medium 4.6b 5.9b
08:30 U.K Central Government NCR (SEP) Medium 5.2b
08:30 U.K Public Finances (PSNCR) (Pounds) (SEP) Medium 3.1b
12:30 Canada Retail Sales (MoM) (AUG) Medium 0.4% 0.3%
12:30 Canada Consumer Price Index (YoY) (SEP) High 2.7% 2.8%
14:00 U.S Existing Home Sales (MoM) (SEP) Medium -0.9% 0.0%
15:30 BOE Governor Carney Speaks in New York High

Euro

The single currency hovered near a one-week low against the dollar today as the European Commission’s criticism of Italy’s populist budget sparked fresh concerns about political tensions in the common currency zone. The euro was relatively flat at $1.1454 on Friday, having fallen 0.4 percent yesterday, its lowest level since Oct. 9. Overall, the EUR/USD traded with a low of 1.1447 and a high of 1.1525 before closing the day around 1.1451 in the New York session.

 

Yen

The Japanese Yen slipped against its most major counterparts in yesterday’s trading session, after the Bank of Japan Governor Haruhiko Kuroda offered an upbeat view on Japanese economy and continued to back low rate strategy to attain inflation goal. Japan’s economy is expected to continue expanding moderately. Overall, the USD/JPY traded with a low of 111.93 and a high of 112.71 before closing the day around 112.18 in the U.S session.

 

British Pound

The British Pound was sharply lower yesterday. On the release front, British retail sales dropped 0.8%, weaker than the estimate of -0.4%. In the U.S, key indicators beat their estimate. The Philly Fed Manufacturing Index dropped to 22.2, above the estimate of 19.7 points. On the employment front, jobless claims dropped to 210 thousand. Overall, the GBP/USD traded with a low of 1.3014 and a high of 1.3129 before closing the day at 1.3015 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened to a five-week low against its U.S counterpart yesterday as the greenback broadly climbed and oil prices added to a sharp decline the previous day. The decline for the Loonie was driven by strengthening of the U.S dollar rather than anything Canada-specific. The U.S dollar rose to a nine-day high. Overall, USD/CAD traded with a low of 1.3016 and a high of 1.3085 before closing the day at 1.3082 in the New York session.

 

Australian Dollar

The Australian Dollar ended yesterday’s trading session lower as risk aversion took over the market. On the local data front yesterday Australian employment report for the month of September showed the economy added a total of 5.6K new jobs, missing the market’s expectations of 15.0K. However, full-time employment was up by 20.3K, with a decline in part-time jobs. Overall, AUD/USD traded with a low of 0.7095 and a high of 0.7149 before closing the day at 0.7097 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 38 and lies below the neutral zone. In general, the pair has lost 0.81%.

 

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 46 reading and lies below the neutral zone. On the whole, the pair has lost 1.14%.

 

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 lost 0.54%.

 

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 40 and lies below the neutral region. On the whole, the pair has gained 0.34%.

 

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 57 and lies above the neutral region. In general, the pair has lost 0.70%.

 

Appendix

  

FOREX Closing Prices for October 18, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.14991 1.15258 1.14478 1.14514 -0.0048
USD/JPY 112.673 112.712 111.93 112.183 -0.4470
GBP/USD 1.31119 1.31297 1.30141 1.30155 -0.0097
USD/CHF 0.99501 0.99733 0.99182 0.99546 0.0003
USD/CAD 1.30178 1.30858 1.30166 1.30826 0.0063
EUR/JPY 129.561 129.707 128.21 128.487 -1.0530
GBP/JPY 147.753 147.769 145.783 146.025 -1.6890
CHF/JPY 113.208 113.438 112.495 112.659 -0.4980
AUD/JPY 80.073 80.417 79.465 79.623 -0.4290
EUR/GBP 0.8767 0.88045 0.87652 0.87959 0.0029
EUR/CHF 1.14401 1.14642 1.30966 1.1400 -0.0044
GBP/CHF 1.30475 1.30639 1.29547 1.29583 -0.0092

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1346 1.1397 1.1424 1.1475 1.1502 1.1553 1.1580
USD/JPY 111.06 111.49 111.84 112.28 112.62 113.06 113.40
GBP/USD 1.2861 1.2938 1.2977 1.3053 1.3092 1.3169 1.3208
USD/CHF 0.9869 0.9894 0.9924 0.9949 0.9979 1.0004 1.0034
USD/CAD 1.2968 1.2992 1.3038 1.3062 1.3107 1.3131 1.3176
EUR/JPY 126.40 127.30 127.90 128.80 129.39 130.30 130.89
GBP/JPY 143.30 144.54 145.28 146.53 147.27 148.51 149.25
CHF/JPY 111.35 111.92 112.29 112.86 113.23 113.81 114.18
AUD/JPY 78.30 78.88 79.25 79.84 80.21 80.79 81.16
EUR/GBP 0.8733 0.8749 0.8773 0.8789 0.8812 0.8828 0.8851
EUR/CHF 1.4142 1.3619 1.2510 1.1987 1.0877 1.0355 0.9245
GBP/CHF 1.2812 1.2883 1.2921 1.2992 1.3030 1.3102 1.3139

 

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

 

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