07 Дек 2018

FOREX Newsletter

FOREX Newsletter

December 07, 2018

 

Pulse of the Market

·      The U.S Dollar weakened against major peers yesterday as U.S Treasury yields tumbled

·      Market sentiment was dampened by disappointing ADP payrolls data and higher jobless claims

·      Bank of Canada Governor Stephen Poloz said the economy was weaker than forecast

·      The Australian Dollar slipped for a third straight day on fears of renewed US-China trade tensions

The U.S Dollar was lower yesterday as the arrest of a Huawei executive spooked investors and disappointing jobs data dampened sentiment. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.46% to 96.56. Meng Wanzhou, the chief financial officer at the Chinese smartphone company Huawei was arrested in Canada on an extradition request by the U.S, which had been investigating whether or not she violated sanctions against Iran. The arrest happened just one week after President Donald Trump and his Chinese counterpart Xi Jinping agreed to a 90-day trade truce. Investors fear it could derail any potential trade talks between the two countries. Japanese Yen gained after the news as the Yen tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize. Market sentiment was also dampened by disappointing ADP payrolls data and higher than expected jobless claims. Data showed private employers hired fewer workers than expected in November, pointing to a moderation in the pace of job growth. The U.S trade deficit jumped to a 10-year high in October as soybean exports dropped further and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective. Sterling was 0.42 percent higher on the day even as worry over how a British Parliament vote on Prime Minister Theresa May’s Brexit deal next week remained in focus. The Canadian dollar fell against its U.S counterpart to a nearly 18-month low, as Bank of Canada Governor Stephen Poloz said the economy was weaker than forecast and predicted low oil prices would cut growth. Poloz, speaking a day after the central bank kept interest rates on hold, repeated that more tightening would be needed.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 Japan Labor Cash Earnings (YoY) (OCT) Medium   1.0% 1.1%
05:00 Japan Leading Index CI (OCT) Medium   104.9 104.3
07:00 German Industrial Production n.s.a. and w.d.a. (YoY) (OCT) Medium   2.1% 0.8%
09:30 U.K BoE/TNS Inflation Next 12 Mths (NOV) High     3.0%
10:00 Euro-Zone Government Expenditure (QoQ) (3Q) Medium   0.3% 0.4%
10:00 Euro-Zone Gross Domestic Product s.a. (YoY) (3Q) Medium   1.7% 1.7%
13:30 Canada Unemployment Rate (NOV) High   5.8% 5.8%
13:30 Canada Net Change in Employment (NOV) High   10.0k 11.2k
13:30 U.S Change in Non-farm Payrolls (NOV) High   198k 250k
13:30 U.S Change in Private Payrolls (NOV) Medium   200k 246k
13:30 U.S Unemployment Rate (NOV) High   3.7% 3.7%
13:30 U.S Average Hourly Earnings (YoY) (NOV) Medium   3.1% 3.1%
15:00 U.S U. of Mich. Sentiment (DEC) High   97 97.5
18:00 Baker Hughes U.S Rig Count (DEC 7) Medium     1076
20:00 U.S Consumer Credit (OCT) Medium   $15.000b $10.923b

Euro

The single currency gained yesterday against the U.S Dollar as the European Commission has adopted a recommendation to promote the wider use of the euro in international energy agreements and transactions. The aim is to strengthen the role of the single currency on the international financial system. Overall, the EUR/USD traded with a low of 1.1319 and a high of 1.1411 before closing the day around 1.1376 in the New York session.

 

Yen

The Japanese Yen pair weakened yesterday as U.S Treasury yields tumbled and traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and heightened market volatility. The benchmark 10-year Treasury yield hit a three-month trough of 2.845 percent. Overall, the USD/JPY traded with a low of 112.21 and a high of 113.18 before closing the day around 112.65 in the U.S session.

 

British Pound

The British Pound posted gains in yesterday’s session. There were no major indicators in the U.K. In the U.S, job employment numbers were soft. ADP nonfarm payrolls plunged to 179 thousand, well off the estimate of 196 thousand. This was the lowest level since May. Unemployment claims edged lower to 231 thousand. Overall, the GBP/USD traded with a low of 1.2697 and a high of 1.2808 before closing the day at 1.2780 in the New York session.

 

Canadian Dollar

The Canadian Dollar fell against its U.S counterpart yesterday to a nearly 18-month low, as Bank of Canada Governor Stephen Poloz said the economy was weaker than forecast and predicted low oil prices would cut growth. Poloz’s comments were likely to reinforce market expectations that the pace of future rate hikes will ease off.  Overall, USD/CAD traded with a low of 1.3352 and a high of 1.3442 before closing the day at 1.3380 in the New York session.

 

Australian Dollar

The Australian Dollar slipped for a third straight session as fears of renewed US-China trade tensions spooked stock markets, while investors toyed with the idea of possible rate cuts at home. Australian two-year bond yields dived to their lowest in nine months at 1.93 per cent. Yesterday’s helping of domestic data did nothing to alter the mood Overall, AUD/USD traded with a low of 0.7189 and a high of 0.7272 before closing the day at 0.7221 in the New York session.

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 45 and lies below the neutral zone. In general, the pair has lost 0.19%.

 

Sterling-Yen

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 0.06%.

 

Aussie-Yen

Currently, the cross is trading above 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 44 reading and lies below the neutral region. In general, the pair has lost 0.91%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 57 and lies above the neutral region. On the whole, the pair has lost 0.13%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 38 and lies below the neutral region. In general, the pair has lost 0.10%.

 

Appendix

  

FOREX Closing Prices for December 06, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13428 1.14112 1.13196 1.13761 0.0033
USD/JPY 113.183 113.189 112.213 112.655 -0.5200
GBP/USD 1.27316 1.28084 1.26977 1.27802 0.0049
USD/CHF 0.99751 0.99882 0.98927 0.99262 -0.0049
USD/CAD 1.33545 1.34423 1.3352 1.33802 0.0028
EUR/JPY 128.386 128.422 127.649 128.15 -0.2430
GBP/JPY 144.126 144.144 143.225 144.022 -0.0870
CHF/JPY 113.434 113.481 112.872 113.457 0.0350
AUD/JPY 82.24 82.285 80.899 81.492 -0.7490
EUR/GBP 0.89069 0.89259 0.88849 0.88958 -0.0012
EUR/CHF 1.13147 1.13199 1.12786 1.12929 -0.0023
GBP/CHF 1.27011 1.2718 1.26481 1.2689 -0.0013

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1235 1.1277 1.1327 1.1369 1.1418 1.1461 1.1510
USD/JPY 111.21 111.71 112.18 112.69 113.16 113.66 114.13
GBP/USD 1.2605 1.2651 1.2716 1.2762 1.2827 1.2873 1.2937
USD/CHF 0.9788 0.9840 0.9883 0.9936 0.9979 1.0031 1.0074
USD/CAD 1.3250 1.3301 1.3341 1.3392 1.3431 1.3482 1.3521
EUR/JPY 126.95 127.30 127.73 128.07 128.50 128.85 129.27
GBP/JPY 142.53 142.88 143.45 143.80 144.37 144.72 145.29
CHF/JPY 112.45 112.66 113.06 113.27 113.67 113.88 114.28
AUD/JPY 79.45 80.17 80.83 81.56 82.22 82.94 83.60
EUR/GBP 0.8838 0.8861 0.8879 0.8902 0.8920 0.8943 0.8961
EUR/CHF 1.1233 1.1256 1.1274 1.1297 1.1316 1.1338 1.1357
GBP/CHF 1.2582 1.2615 1.2652 1.2685 1.2722 1.2755 1.2792

 

 

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.