10 九月 2018

FOREX Newsletter

FOREX Newsletter

September 10, 2018

 

  Pulse of the Market

·      U.S average hourly earnings rose 0.4% last month, the strongest pace of growth in nearly a year

·      Euro and sterling were also victims of risk aversion and U.S Dollar strength

·      On Friday Canada lost 51K jobs last month data showed

·      The Australian and New Zealand dollars hit a 2-year low and further losses are likely

 

The U.S Dollar traded higher against all of the major currencies on Friday on the back of a stronger jobs report and President Trump’s threat of fresh tariffs on China and Japan. Stocks extended their slide and unless the President retracts his threats, further losses are likely which means more risk aversion and losses for the major currencies. Friday’s non-farm payrolls report guarantees a Fed hike on September 26th. Not only were there more than 200K jobs created in the month of August but wages are growing! Average hourly earnings rose 0.4% last month, the strongest pace of growth in nearly a year. Between the record highs in U.S stocks last month and the pickup in earnings, next week’s retail sales could surprise to the upside as well. Comments from U.S. policymakers have also been hawkish with Fed Presidents Mester, Rosengren and Kaplan looking for the policy rate to move towards neutral. The greenback should extend its gains versus EUR, AUD and other major currencies, but the outlook for USD/JPY is tricky. USD/JPY dropped as safe haven carry flows returned home after President Trump hinted that Japan could be the target for their next trade fight. He’s focused on reducing deficits and in a phone interview with the Wall Street Journal he said they may not be happy “as soon as I tell them how much they have to pay.” Late Friday, he also tightened the noose on China by threatening to impose another $267B in tariffs. These threats make it very difficult for stocks and USD/JPY rise. Euro and sterling were also victims of risk aversion and U.S Dollar strength. Sterling had traded above 1.30 on the back of positive Brexit comments from the EU but it gave up all of its gains to end the day in negative territory. There’s a Bank of England monetary policy announcement in the week ahead but Brexit negotiations and data should have a greater impact on the currency because having just raised rates in August, they are in no position to tighten again. The market is also not pricing in another rate hike from the BoE until the middle of next year. The Euro ended the week near its 2 week lows on the back of softer German data. Italian yields fell every day this past week so Italy is less of a problem but there’s very little reason for the ECB, who also has a policy meeting next week to change their neutral bias.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  China New Yuan Loans CNY (AUG) High     1450.0b
01:30 China Producer Price Index (YoY) (AUG) Medium     4.6%
01:30 China Consumer Price Index (YoY) (AUG) High     2.1%
04:30 Japan Bankruptcies (YoY) (AUG) Medium     -1.68%
08:30 U.K Visible Trade Balance (Pounds) (JUL) Medium     -£11383
08:30 U.K Trade Balance (JUL) Medium     -£1861
08:30 U.K Industrial Production (YoY) (JUL) Medium     1.1%
08:30 U.K Manufacturing Production (YoY) (JUL) Medium     1.5%
08:30 Euro-Zone Sentix Investor Confidence (SEP) Low     14.7
08:30 U.K Gross Domestic Product (MoM) (JUL) Medium     0.1%
19:00 U.S Consumer Credit (JUL) Medium     $10.211b

Euro

The single currency finished in the middle of the pack last week. Thursday’s ECB meeting should bring little new information as the policy was preset for the next year back at the June meeting; a mention of European banks’ exposure to Turkish borrowers would excite markets. For the second week in a row, the Euro finished lower against the U.S Dollar. Overall, the EUR/USD traded with a low of 1.1555 and a high of 1.1560 before closing the day around 1.1555 in the New York session.

 

Yen

The Japanese Yen pair was sharply higher on Friday and erased weekly losses on the back of a rally of the US Dollar across the board following US employment data and comments from Fed’s Kaplan. The US economy added 201K jobs during August, above the 191K expected. The number that boosted the greenback was the rise in average hourly earnings. Overall, the USD/JPY traded with a low of 110.90 and a high of 111.03 before closing the day around 111.01 in the U.S session.

 

British Pound

The British Pound recorded a rare weekly advance on the Euro and other currencies in the wake of comments pertaining to the Irish border question from the EU’s chief Brexit negotiator Michel Barnier. Barnier has said he is open to “other backstops” for the Irish border question, while newswires report he now believes negotiations are 90% complete. Overall, the GBP/USD traded with a low of 1.2916 and a high of 1.2922 before closing the day at 1.2916 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened against its U.S counterpart and fell nearly 1 per cent for the week after data showed the economy unexpectedly shed jobs in August. Canada’s economy lost 51,600 jobs in August, the biggest decline since January, as losses in part-time work overtook gains in full-time employment, data from Statistics Canada showed. Overall, USD/CAD traded with a low of 1.3169 and a high of 1.3179 before closing the day at 1.3171 in the New York session.

 

Australian Dollar

The Australian Dollar has shed almost 13 per cent against the US currency since late January, and the downtrend became further entrenched at the weekend in the wake of the latest US jobs data and President Donald Trump’s decision to ratchet global trade tensions ever higher. That threat came even as the top U.S and Canadian negotiators were meeting in Washington. Overall, AUD/USD traded with a low of 0.7096 and a high of 0.7202 before closing the day at 0.7106 in the New York session.

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 56 and lies above the neutral zone. In general, the pair has lost 0.32%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 51 reading and lies above the neutral zone. On the whole, the pair has gained 0.18%.

 

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 39 reading and lies below the neutral region. In general, the pair has lost 0.99%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is also issuing a bearish signal. The Relative Strength Index is above 55 and lies above the neutral region. On the whole, the pair has lost 0.50%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 33 and lies below the neutral region. In general, the pair has gained 0.30%.

 

Appendix

  

FOREX Closing Prices for September 07, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1559 1.15607 1.1555 1.15551 -0.0067
USD/JPY 110.975 111.03 110.909 111.015 0.2840
GBP/USD 1.29203 1.29222 1.29161 1.29169 -0.0011
USD/CHF 0.96893 0.96919 0.96838 0.96866 0.0036
USD/CAD 1.31767 1.3179 1.31695 1.31719 0.0032
EUR/JPY 128.323 128.339 128.205 128.291 -0.4150
GBP/JPY 143.379 143.455 143.315 143.414 0.2560
CHF/JPY 114.532 114.584 114.492 114.571 -0.1370
AUD/JPY 78.814 78.90 78.814 78.892 -0.7850
EUR/GBP 0.89436 0.89461 0.89424 0.89433 -0.0045
EUR/CHF 1.1202 1.12034 1.11936 1.11944 -0.0022
GBP/CHF 1.25201 1.25204 1.25119 1.25139 0.0037

   

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1547 1.1551 1.1553 1.1557 1.1559 1.1563 1.1565
USD/JPY 110.82 110.86 110.94 110.98 111.06 111.11 111.18
GBP/USD 1.2909 1.2912 1.2915 1.2918 1.2921 1.2925 1.2927
USD/CHF 0.9675 0.9679 0.9683 0.9687 0.9691 0.9696 0.9699
USD/CAD 1.3158 1.3164 1.3168 1.3173 1.3177 1.3183 1.3187
EUR/JPY 128.08 128.14 128.22 128.28 128.35 128.41 128.49
GBP/JPY 143.19 143.25 143.33 143.39 143.47 143.53 143.61
CHF/JPY 114.42 114.46 114.51 114.55 114.61 114.64 114.70
AUD/JPY 78.75 78.78 78.84 78.87 78.92 78.95 79.01
EUR/GBP 0.8938 0.8940 0.8942 0.8944 0.8945 0.8948 0.8949
EUR/CHF 1.1181 1.1187 1.1191 1.1197 1.1201 1.1207 1.1210
GBP/CHF 1.2502 1.2507 1.2510 1.2515 1.2519 1.2524 1.2527

 

 

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

 

 

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