June 27, 2018
Pulse of the Market
· Markets regained composure after remarks by White House trade adviser Peter Navarro
· The Treasury Department is due to announce restrictions on Chinese investment in the U.S by Friday
· Incoming BOE policymaker Jonathan Haskel said that there may be slacker in the UK economy
· Trade tensions and NAFTA tape bombs are the fastest growing risks , leaving the loonie sensitive
|The U.S Dollar rose to the day’s highs against a currency basket yesterday as market sentiment recovered a day after mounting trade tensions sparked a selloff in risky assets. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.32% to 94.25 after ending the previous session down 0.24%. The greenback had been pressured lower as long-term U.S. Treasury yields slid amid heightened risk aversion in financial markets. Markets regained composure after remarks by White House trade adviser Peter Navarro Monday helped ease some investor concerns about U.S. trade policy. Navarro indicated that plans to bar Chinese companies from investing in U.S. technology firms won’t be as damaging to the economy as markets are anticipating. The Treasury Department is due to announce restrictions on Chinese investment in the U.S by Friday. Such a move would counter a Chinese initiative to be a global leader in technology and mark another escalation in the trade conflict between Washington and Beijing, following the threat of tit-for-tat tariffs. Besides the trade dispute with China, U.S. President Donald Trump has ratcheted up trade tensions with the European Union by threatening tariffs on cars imported from the bloc. The dollar was still a touch lower against the yen, with USD/JPY last at 109.72, having fallen to a two-week low of 109.36 on Monday. The safe haven yen is often sought by investors in times of geopolitical tensions and market turmoil. The euro fell to the day’s lows, with EUR/USD down 0.38% to 1.1658 after edging up to a two-week high. Sterling was also lower against the firmer dollar, with GBP/USD sliding 0.35%. The pound came under pressure after incoming Bank of England policymaker Jonathan Haskel said that there may be slacker in the UK economy, which would weaken the case for interest rate hikes. He added that the central bank has scope to cut rates slightly lower in case of an economic downturn. The Canadian Dollar is on the verge of another leg down that could see it reach fresh multi-year lows against the US Dollar in the weeks ahead.
|01:00||New Zealand ANZ Activity Outlook (JUN)||Medium||13.6|
|08:30||BOE’s Carney Speaks About Financial Stability Report||High|
|11:00||U.S MBA Mortgage Applications (JUN 22)||Medium||5.1%|
|12:30||U.S Wholesale Inventories (MoM) (MAY)||Medium||0.2%||0.1%|
|12:30||U.S Advance Goods Trade Balance (MAY)||High||-$69.0b||-$68.2b|
|12:30||U.S Durable Goods Orders (MAY)||High||-0.9%||-1.6%|
|12:30||U.S Durables Ex Transportation (MAY)||Medium||0.5%||0.9%|
|14:00||U.S Pending Home Sales (YoY) (MAY)||Medium||0.4%|
|14:30||DOE U.S. Crude Oil Inventories (JUN 22)||Medium||-5914k|
|16:15||U.S Fed’s Rosengren Speaks on Ethics and Economics||Low|
|19:00||Bank of Canada Governor Stephen Poloz Gives Speech in Victoria||High|
|21:00||RBNZ Official Cash Rate (JUN 28)||High||1.75%||1.75%|
The single currency ended yesterday’s trading session lower. EU summit that was supposed to be dominated by unity on a common problem has instead turned into discord. As of a month ago, this week’s gathering of EU heads of government in Brussels was set to focus on Brexit. The UK was expected to finally present its plans for the future relationship. Overall, the EUR/USD traded with a low of 1.1633 and a high of 1.1719 before closing the day around 1.1646 in the New York session.
The Japanese Yen pair built on its intraday recovery from two-week lows and is now looking to build on its momentum back above the key 110.00 psychological mark. Against the backdrop of a goodish pickup in the US Dollar demand, a positive opening across the US equity markets weighed on the Japanese Yen’s safe-haven appeal. Overall, the USD/JPY traded with a low of 109.35 and a high of 110.19 before closing the day around 110.01 in the U.S session.
The British Pound fell after comments by John Haskel, an incoming member of the Monetary Policy Committee of the Bank of England. Haskel was a relatively unknown voice until now, and his dovish commentary and the concerns he voiced for the possible impact on the British economy after the Brexit resulted in a swift sell off for the Pound. Overall, the GBP/USD traded with a low of 1.3190 and a high of 1.3290 before closing the day at 1.3221 in the New York session.
The Canadian Dollar continues to have a quiet week. Yesterday North American session, USD/CAD is traded up 0.19% on the day. On the release front, there were no Canadian events until Thursday, so U.S indicators will have an added impact on the movement of USD/CAD. The Bank of Canada has dropped hints that it is ready to raise rates in the second half of 2018. Overall, USD/CAD traded with a low of 1.3278 and a high of 1.3327 before closing the day at 1.3304 in the New York session.
The Australian Dollar continued to struggle through yesterday as a lack of any meaningful data for release to start of the week hindered any chance of movements higher. The Aussie dollar was dragged down once again by ongoing trade tensions and a drop-in equity prices. Aussie was one of the worst performing currencies of the day. Overall, AUD/USD traded with a low of 0.7378 and a high of 0.7421 before closing the day at 0.7388 in the New York session.
EUR/JPY is trading below 14, 50 and 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 42 and lies below the neutral zone. In general, the pair has lost 0.28%.
Currently, GBP/JPY is trading below 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 41 reading and lies below the neutral zone. On the whole, the pair has lost 0.18%.
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 40 reading and lies below the neutral region. In general, the pair has lost 0.08%.
This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies above the neutral region. On the whole, the pair has lost 0.07%.
This cross is trading below 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 37 and lies below the neutral region. In general, the pair has lost 0.06%.
|FOREX Closing Prices for June 26, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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