President Trump, EU President Juncker strike deal, NAFTA negotiations resurface

OFX Daily Market News

Posted by OFX

  Australian Dollar

Having opened a shade above 74c at the start of last week, the Australian Dollar came under selling pressure as the Asian session kicked into full swing. The AUD/USD touched a low of 0.7373 against the US Dollar and with little local data the Aussie remained centred on Chinese currency developments. China’s central bank injected 502 billion Yuan to financial instructions via its one-year medium-term lending facility (MLF) with rates unchanged, a move which was totally unexpected by the market.

Weighing further on the Aussie was U.S data released by the Federal Reserve Bank of Chicago. The National Activity Index boosted by the upbeat production-related indicators jumped up to 0.43 in June from -0.45 in May a move that pushed the US Dollar index higher. On the commodity front, oil, gold and base metal prices were all a tad lower.

Mid-week saw the release of Australian CPI figures, with headline inflation remaining flat at 0.4% q/q which was below expectations and shifted just into the RBA’s target range of 2-3% at 2.1% y/y. Additional, the trimmed mean CPI, which is the RBA’s preferred measure, edged down 0.5% q/q while was on a y/y basis at 1.9% y/y. Market pricing is implying that the cash rate will remain unchanged for a considerable period of time, with a less than 50% chance of a hike in the next 12 months.

To close out the week, Australian Import Prices increased at a faster-than-expected pace in the three months ending June. The import price index climbed 3.2 percent sequentially in the second quarter, faster than the 2.0 percent rise in the first quarter. It was the third consecutive quarterly increase and above the 1.9 percent rise economists had forecast. The increase was driven by higher prices paid for petroleum, petroleum products and related materials, general industrial machinery, electrical machinery, apparatus and appliances. On a yearly basis, imports prices grew at a faster rate of 6.0 percent in the June quarter, after a 2.6 percent gain in the March quarter. Data also revealed that export prices grew 1.9 percent quarterly and by 6.6 percent yearly in the June quarter.

 

 

 

  New Zealand Dollar

The New Zealand Dollar gave up gains enjoyed into last weeks opening sessions as deeper depreciations in the CNY weighed on the unit.

Despite reasonable and improving domestic economic performance, New Zealand’s exposure to a global slowdown, in particular, the Chinese value chain has driven the Kiwi to record short positions and been a primary catalyst for the renewed downside. However recent strength across commodity prices has helped firm support on moves toward 12 month low and 0.67.

Mide-week, the Kiwi shook off a softer than anticipated trade balance print and found support through Wednesday’s sessions as the embattle Chinese Yuan edged marginally higher while trade talks between the US and Europe appear to have eased tensions and fears for an all-out trade war. President Trump and EU President Juncker met in Washington with both sides allowing concessions in an agreement that is hoped will ease trade barriers.

The impromptu press conference helped ease concerns linked to an escalating trade war and fostered a short-term upward run on commodity currencies. The Kiwi however then gave up gains as investors expect Trump attentions to return to US-Sino trade hostilities. As the tariff battle between the US and China continues and the CNY remains under pressure the upside demand for the NZD will likely be short.

 

 

 

  British Pound

Sterling has been under pressure of late as political concerns re: Brexit weigh on the currency with political in-fighting and high profile resignations in PM, Theresa May’s cabinet, however, it was a fairly quiet start to last week from the pound’s perspective.

There was no top-tier UK data to begin the earlier sessions, however, one piece of news to catch sterling holder’s eyes was at a forum in Liverpool where Bank of England Deputy Governor, Ben Broadbent stated he hadn’t decided on whether to vote for a rate hike next week. Broadbent is seen as a dove amongst the Monetary Policy Committee so it could be seen as a hawkish signal that he’s contemplating voting to raise rates. Chances of a hike are around 80% currently.

Another small crumb of comfort may be reports that UK PM, Theresa May is set to take charge of Brexit negotiations going forward. With former Brexit Secretary, David Davis resigning in the wake of the new plan for future trade/customs being revealed it appears the PM will be taking a more assertive role alongside new Brexit Secretary, Dominic Raab. We could see a (very) limited recovery in sterling over the next six weeks as parliament has its summer break and Brexit news thins out a little however we are now only three months before a future trade/customs plan is meant to have been thrashed out by so it could only be a temporary reprieve.

 

 

 

  United States Dollar

The United States Dollar began last week on road to recovery as demand for the greenback returned to the market. The catalyst for the reversal of fortunes, albeit small, was the upbeat data from the Federal Reserve Bank of Chicago which showed the National Activity Index rose to 0.43 in June. However, the good news was significantly counter-balanced by a 0.6% reduction in existing home sales.

The excellent start continued for the Greenback, however, as commodity currencies began to depreciate against the USD when China announced it would inject $74b of liquidity into the market, further easing their accommodative monetary policy. The CNY immediately plunged 0.4% which contributed to declines across the board for commodity currencies.

The big headline last week came out of Europe this time with conciliatory comments from President Trump after his press conference with EU President Juncker. While the comments by both presidents after the meeting were vague and unhelpful, a halt on tariff implementation is nevertheless more than the market expected. The positive market sentiment saw equity markets and the EUR appreciate significantly initially, although these were both later reversed due to unrelated announcements. Nevertheless, positivity returned to the market which led to a modest recovery for the Greenback, close out the week near the 0.8580 mark.

 

 

 

  Euro

As we near August, we get closer to what is typically a quiet period for the Eurozone as traders and business’ take time off and head to the beach for a break.

Last week’s main event, which turned out to be a non-event, was the European Central Bank interest rate decision, keeping rates unchanged, as expected, and reiterating the pledge to keep them flat until mid-2019. No change of policy was almost guaranteed, so the markets primary focus was on the comments of ECB chief, Mario Draghi’s, held at a press conference 45 mins after the release. To summarize, Draghi sounded fairly upbeat in his accompanying presser and despite the risk of a trade war, the ECB president said that the latest data indicated the region was “proceeding along a solid and broad-based growth path”.

In other EUR data, the monthly tranche of PMIs has been released with a mixed bag of results being shown. The Eurozone’s purple patch of expansion seen late last year has been replaced with a more modest pace of output of late highlighted by the reduction in PMI figures. German manufacturing for July printed 57.3 beating expectations but some way off the series of >60 readings we saw either side of Christmas. Eurozone Manufacturing as a whole came in at 55.1 ahead of the 54.7 forecast. The EZ Services number printed 54.4 slightly worse than the 55.0 predicted.

 

 

 

  Canadian Dollar

With a very light week on the economic data front for Canada, market participants paid close attention last week to resuming NAFTA negotiations. Foreign Affairs Minister Chrystina Freeland visited Mexico with outgoing and incoming counterparts after talks were stalled for the July 1st Mexican Presidential elections. Trump has threatened to scrap NAFTA and put together singular deals for Canada and Mexico, also saying that he would prioritize a Mexican agreement first.

Mid-week the loonie benefited from a US dollar sell-off which was also bolstered by rising crude oil prices. WTI pushed back towards $70 a barrel for the first time in seven days providing the loonie a tailwind.

To close the week, we saw the loonie was trading at the highest level in a month versus the USD, around 1.3030, but couldn’t hold onto gains despite comments by US Trade Representative Robert Lighthizer around NAFTA and the possibility of reaching a tentative accord next month. USD/CAD closed the week at 1.3053.

 

 

 

Posted by OFX

Once again Aussie fails to hold on above 74c

OFX Daily Market News

Securities Identifier YHOO NYSE

Posted by OFX

  Australian Dollar

The Australian Dollar once again is back under the 74c handle against the Greenback relinquishing all gains from the session prior. The AUD/USD suffered at the hands of a stronger U.S Dollar falling from 0.7463 down to 0.7372. The move was sparked by a sharp drop in copper prices and markets squaring up positions ahead of top tier US data out later today US time.

Speaking of which, locally yesterday Australian Import Prices increased at a faster-than-expected pace in the three months ended June, figures from the Australian Bureau of Statistics revealed. The import price index climbed 3.2 percent sequentially in the second quarter, faster than the 2.0 percent rise in the first quarter. It was the third consecutive quarterly increase and above the 1.9 percent rise economists had forecast. The increase was driven by higher prices paid for petroleum, petroleum products and related materials, general industrial machinery, electrical machinery, apparatus and appliances. On a yearly basis, imports prices grew at a faster rate of 6.0 percent in the June quarter, after a 2.6 percent gain in the March quarter. Data also revealed that export prices grew 1.9 percent quarterly and by 6.6 percent yearly in the June quarter.

The domestic docket sees PPI figures due at 11.30am AEST, figures are expected to remain flat at 0.5%. Markets will be closely watching tonight’s US Q2 GDP figures
with consensus for growth of 4.2%.

Technical levels to watch; support at 0.7330 and 0.7310 with resistance 0.7400 and 0.7430

 

 

 

  New Zealand Dollar

AUD / NZD Expected Range: 1.0835 – 1.0930

The New Zealand dollar opens lower this morning having fallen sharply through trade yesterday as the uptick in risk appetite enjoyed following reduced trade tensions faltered. The NZD touched intraday highs at 0.6851 following an upbeat press conference between President Trump and EU Commission President Jean Claude Juncker where both leaders promised to work toward zero tariffs. The impromptu press conference helped ease concerns linked to an escalating trade war and fostered a short term upward run on commodity currencies. The Kiwi however then gave up gains as investors expect Trump attentions to return to US-Sino trade hostilities. As the tariff battle between the US and China continues and the CNY remains under pressure the upside demand for the NZD will likely be short.

Opening this morning 8 tenths of a cent lower the Kiwi currently buys just 0.6779 U.S cents as attentions turn to an all importing US GDP indicator. With expectations for an exceptionally strong Q2 a print at or around 4.8%-5% could prompt a USD extension into the weekend and see the Kiwi test lows nearing 0.6720.

 

 

 

  British Pound

GBP / AUD Expected Range: 1.7650 – 1.7850

The Great British Pound reached a high of 1.3212 yesterday against the greenback, its highest for this week, however the Sterling gave up most of those gains on the back of renewed Brexit-related fears. The GBP/USD pair closed around 1.3100. The Sterling looks to remain under pressure against its rival counterparts over coming months as markets eye the UK’s March 2019 Brexit date and buy protection against a substantial move lower in the Pound in the event of no deal being reached.

On the data front today sees the release of Nationwide Housing Prices in July, which are expected to show a 0.5% rise from June and a 2.0% rise since July 2017.

From a technical perspective, the GBP/USD pair is currently trading at 1.3106. We continue to expect support to hold on moves approaching 1.3090 while now any upward push will likely meet resistance around 1.3145.

 

 

 

  United States Dollar

AUD / USD Expected Range: 0.7320 – 0.7460

The United States Dollar strengthened over the last 24 hours, reversing its declines over the previous day. The catalyst was again President Trump who, along with EU President Juncker, agreed to hold off on tariff implementation so that both sides could negotiate a deal. Closer to home, US economic data was mixed with monthly trade balance and headline durable goods orders weaker than expected. This morning, the Greenback opens 0.59% higher at 94.79, against a basket of currencies.

The major headline over the last 24 hours was the ceasefire in on-going trade tensions between the US and EU. While the comments by both presidents after the meeting were vague and unhelpful, a halt on tariff implementation is nevertheless more than the market expected. The positive market sentiment saw equity markets and the EUR appreciate significantly initially, although these were both later reversed due to unrelated announcements. Nevertheless, positivity returned to the market which led to a small recovery for the Greenback.

Closing out the week, attentions turn to US, second quarter GDP figures for direction.

 

 

 

  Euro

AUD / EUR Expected Range: 0.6300 – 0.6360

EURUSD dropped to a weekly low, down 0.8% to 1.1640 after the ECB kept rates unchanged, as expected, and reiterated a pledge to keep them flat until mid-2019.

On the other hand, the market is turning bullish towards the USD and the release of US 2Q GDP Tonight should be an interesting event to watch.

From a technical perspective, support is expected at 1.1575 (July 19th low) and resistance at 1.1791 (July 9 high).

 

 

 

  Canadian Dollar

AUD / CAD Expected Range: 0.9610 – 0.9730

The USDCAD ended the session 0.20% higher, in line with broad USD strength against all major currencies, at 1.3072.

The loonie was trading at the highest level in a month versus the USD, around 1.3030, but couldn’t hold onto gains despite comments by US Trade Representative Robert Lighthizer around NAFTA and the possibility of reaching a tentative accord next month.

Support for the USDCAD sits now on yesterday’s lows around the 1.3030s while 1.31 should act as short-term resistance.

 

 

 

Posted by OFX

Dollar Opens Broadly Stronger Ahead Of Much Anticipated US GDP

OFX Daily Market News

Securities Identifier YHOO NYSE

Posted by OFX

  British Pound

GBP/USD fell throughout the day yesterday, mostly a result of a strengthening dollar. It broke down below the 100 and 200 hour moving average but has at least been steady through the overnight session. There wasn’t much by way of UK economic data on Thursday to make mention of and political and Brexit headlines – mostly negative – continue to dominate, albeit there was no fresh news in this regard yesterday.

Theresa May flies off to Austria today for further Brexit talks, this after EU chief negotiator Michel Barnier said on Thursday that the EU “will not delegate the application of its customs policy and rules and VAT and excises duty collection to a non-member who would not be subject to the EU’s governance structures”. After talks with the Austrian chancellor and Czech PM the UK PM then goes off on her summer hols.

Today shouldn’t be too much different to yesterday, as far as trading of cable is concerned. There’s no UK data due out and the Brexit headlines, as well as US data, will likely take centre stage.

 

 

 

  United States Dollar

GBP / USD Expected Range: 1.3045 – 1.3200

The dollar finished the day broadly stronger yesterday. It pushed higher vs. both the pound and euro and opens firmer against both currencies this morning. US data was mixed yesterday with durable goods orders missing expectations and unemployment claims printing in line with market forecasts.

In other news yesterday, President Trump held a joint press conference with President Juncker saying “we expect something very positive” to come of their meeting. The two announced that they would essentially be pulling back from all-out trade war and would work to reduce tariffs. This was one of the catalysts for the dollar strength.

Markets now turn their attention to the US Q2 GDP number, due for release this afternoon. This data may create some volatility.

 

 

 

  Euro

GBP / EUR Expected Range: 1.1200 – 1.1300

EUR/USD dropped to a weekly low, down 0.8% to 1.1640 after the ECB kept rates unchanged, as expected, and reiterated a pledge to keep them flat until mid-2019. EUR/USD also fell despite Draghi sounded fairly upbeat in his accompanying presser. Despite the risk of a trade war, the ECB president said that the latest data indicated the region was “proceeding along a solid and broad-based growth path”.

EUR/USD opens close to where it finished the day yesterday. Unless US GDP surprises, it could be a quiet finish to the week for the single currency.

 

 

 

  Australian Dollar

GBP / AUD Expected Range: 1.7680 – 1.7900

The Australian Dollar once again is back under the 74c handle against the greenback relinquishing all gains from the session prior. The AUD/USD suffered at the hands of a stronger US dollar falling from 0.7463 down to 0.7372. The move was sparked by a sharp drop in copper prices and a broadly stronger dollar.

Australian PPI data, released overnight failed to do the aussie dollar any favours, showing that producer price inflation slowed again, this time coming in at 0.3% vs. forecasts for 0.5%. It creates a bit more of a headache for the RBA as the inflation rate shows few signs of recovering off of the lower end of its desired band.

 

 

 

  Canadian Dollar

GBP / CAD Expected Range: 1.7050 – 1.7220

The USD/CAD ended the session 0.20% higher, in line with broad USD strength against all major currencies, at 1.3072.

The loonie was trading at the highest level in a month versus the USD, around 1.3030, but couldn’t hold onto gains despite comments by US Trade Representative Robert Lighthizer around NAFTA and the possibility of reaching a tentative accord next month.

Support for the USD/CAD sits now on yesterday’s lows around the 1.3030s while 1.31 should act as short-term resistance.

 

 

 

  New Zealand Dollar

GBP / NZD Expected Range: 1.9280 – 1.9450

The New Zealand dollar opens lower this morning having fallen sharply through trade yesterday as it seemed global trade tensions were starting to ease. The NZD touched intraday highs at 0.6851 following an upbeat press conference between President Trump and EU Commission President Jean Claude Juncker where both leaders promised to work toward zero tariffs. The impromptu press conference fostered a short term upward run on commodity currencies. The Kiwi however then gave up gains as investors expect Trump’s attentions to return to US-Sino trade hostilities. As the tariff battle between the US and China continues and the CNY remains under pressure the upside demand for the NZD will likely be short.

Opening this morning 8 tenths of a cent lower, the kiwi currently buys just 0.6779 U.S cents as attentions turn to an all importing US GDP indicator. With expectations for an exceptionally strong Q2 a print at or around 4.8%-5% could prompt further dollar strength into the weekend and see the kiwi test lows nearing 0.6720.

 

 

 

Posted by OFX

US Q2 GDP saw Growth of 4.1% inline with Expectations the Reading was the Fastest Pace Since 2014

OFX Daily Market News

Securities Identifier YHOO NYSE

Posted by OFX

  United States Dollar

The United States Dollar strengthened over the last 24 hours, reversing its declines over the previous day. The catalyst was again President Trump who, along with EU President Juncker, agreed to hold off on tariff implementation so that both sides could negotiate a deal. Closer to home, US economic data was mixed with monthly trade balance and headline durable goods orders weaker than expected. This morning, the Greenback opens 0.59% higher at 94.79, against a basket of currencies.

The major headline over the last 24 hours was the ceasefire in on-going trade tensions between the US and EU. While the comments by both presidents after the meeting were vague and unhelpful, a halt on tariff implementation is nevertheless more than the market expected. The positive market sentiment saw equity markets and the EUR appreciate significantly initially, although these were both later reversed due to unrelated announcements. Nevertheless, positivity returned to the market which led to a small recovery for the Greenback.

Markets now turn their attention to the US Q2 GDP which came in just above consensus of 4% posting a 4.1%. The growth number double the previous quarter reading on the back of consumer spending and a narrowing trade deficit. Later this morning we have US consumer sentiment as the next risk event for market participants.

 

 

 

  Canadian Dollar

USD / CAD Expected Range: 1.3029 – 1.3114

The USDCAD ended the session 0.20% higher, in line with broad USD strength against all major currencies, at 1.3072.

The loonie was trading at the highest level in a month versus the USD, around 1.3030, but couldn’t hold onto gains despite comments by US Trade Representative Robert Lighthizer around NAFTA and the possibility of reaching a tentative accord next month.

Support for the USDCAD sits now on yesterday’s lows around the 1.3030s while 1.3114 should act as short-term resistance.

 

 

 

  Euro

EUR / USD Expected Range: 1.1621 – 1.1658

EUR/USD dropped to a weekly low, down 0.8% to 1.1640 after the ECB kept rates unchanged, as expected, and reiterated a pledge to keep them flat until mid-2019. EUR/USD also fell despite Draghi sounded upbeat in his accompanying presser. Despite the risk of a trade war, the ECB president said that the latest data indicated the region was “proceeding along a solid and broad-based growth path”.

EURUSD dropped to a weekly low, down 0.8% to 1.1640 after the ECB kept rates unchanged, as expected, and reiterated a pledge to keep them flat until mid-2019.

From a technical perspective, support is expected at 1.1575 (July 19th low) and resistance at 1.1791 (July 9 high).

 

 

 

  British Pound

GBP / USD Expected Range: 1.3083 – 1.3123

GBP/USD fell throughout the day yesterday, mostly a result of a strengthening dollar. It broke down below the 100 and 200-hour moving average but has at least been steady through the overnight session. There wasn’t much by way of UK economic data on Thursday to make mention of and political and Brexit headlines – mostly negative – continue to dominate, albeit there was no fresh news in this regard yesterday.

Theresa May flies off to Austria today for further Brexit talks, this after EU chief negotiator Michel Barnier said on Thursday that the EU “will not delegate the application of its customs policy and rules and VAT and excises duty collection to a non-member who would not be subject to the EU’s governance structures”. After talks with the Austrian chancellor and Czech PM the UK PM then goes off on her summer hols.

Today shouldn’t be too much different from yesterday, as far as trading of the cable is concerned. There’s no UK data due out and the Brexit headlines, as well as US data, will likely take center stage.

 

 

 

  Australian Dollar

AUD / USD Expected Range: 0.7370 – 0.7399

The Australian Dollar once again is back under the 74c handle against the Greenback relinquishing all gains from the session prior. The AUD/USD suffered at the hands of a stronger U.S Dollar falling from 0.7463 down to 0.7372. The move was sparked by a sharp drop in copper prices and markets squaring up positions ahead of top-tier US data out later today US time.

Speaking of which, locally yesterday Australian Import Prices increased at a faster-than-expected pace in the three months ended June, figures from the Australian Bureau of Statistics revealed. The import price index climbed 3.2 percent sequentially in the second quarter, faster than the 2.0 percent rise in the first quarter. It was the third consecutive quarterly increase and above the 1.9 percent rise, economists had forecast. The increase was driven by higher prices paid for petroleum, petroleum products and related materials, general industrial machinery, electrical machinery, apparatus, and appliances. On a yearly basis, imports prices grew at a faster rate of 6.0 percent in the June quarter, after a 2.6 percent gain in the March quarter. Data also revealed that export prices grew 1.9 percent quarterly and by 6.6 percent yearly in the June quarter.

The domestic docket sees PPI figures due at 11.30am AEST, figures are expected to remain flat at 0.5%. Markets will be closely watching tonight’s US Q2 GDP figures with consensus for growth of 4.2%.

 

 

 

  New Zealand Dollar

NZD / USD Expected Range: 0.6763 – 0.6789

The New Zealand dollar opens lower this morning having fallen sharply through trade yesterday as the uptick in risk appetite enjoyed following reduced trade tensions faltered. The NZD touched intraday highs at 0.6851 following an upbeat press conference between President Trump and EU Commission President Jean Claude Juncker where both leaders promised to work toward zero tariffs. The impromptu press conference helped ease concerns linked to an escalating trade war and fostered a short-term upward run on commodity currencies. The Kiwi however then gave up gains as investors expect Trump attentions to return to US-Sino trade hostilities. As the tariff battle between the US and China continues and the CNY remains under pressure the upside demand for the NZD will likely be short.

Opening this morning 8 tenths of a cent lower the Kiwi currently buys just 0.6779 U.S cents as attentions turn to an all importing US GDP indicator. With expectations for an exceptionally strong Q2, a print at or around 4.8%-5% could prompt a USD extension into the weekend and see the Kiwi test lows nearing 0.6720.

 

 

 

Posted by OFX

Aussie opens at two-week highs

OFX Daily Market News

Securities Identifier YHOO NYSE

Posted by OFX

  Australian Dollar

The Australian Dollar has found some upside when valued against its US counterpart over the past 24 hours, trading as high as 0.7464 just at the end of the New York session. However, it wasn’t all good news intraday with the release of Australian CPI figures, headline inflation remained flat at 0.4% q/q which was below expectations and headline inflation moved just into the RBA’s target range of 2-3% at 2.1% y/y. The trimmed mean which is the RBA’s preferred measure edged down 0.5% q/q while was on a y/y basis at 1.9% y/y – still just under the target band hence why we initially saw a high of 0.7448 just after 11.30 AEST and then a quick pull back thereafter. Traders continued to sell the Aussie and as we closed the Asian session and we were back under 74c again. Market pricing is implying that the cash rate will remain unchanged for a considerable period of time, with a less than 50% chance of a hike in the next 12 months.

The local unit buoyed by risk appetite in the markets after Trump and EU Junker struck a deal to increase trade, reduce tariffs and costs, and increase U.S. farm and natural gas exports to Europe in order to avert an all-out trade war between the two.

Looking ahead, we have the release of Import Prices by the Australian Bureau of Statistics which measures the change in the price of goods purchased by importers. The data contributes to inflation for both businesses and consumers. We are expecting to see an increase on 1.9% on the previous 2.1% while the Export Price Index is expected at 3.9% (previous 4.9%). The data is unlikely to drive much action, upport sitting at 0.7400 and resistance up at 0.7490.

 

 

 

  New Zealand Dollar

AUD / NZD Expected Range: 1.0830 – 1.0970

The New Zealand dollar rallied overnight jumping back through 0.68 to touch highs at 0.6842 as the US dollar fell against G-10 counterparts. The Kiwi shook off a softer than anticipated trade balance print and found support through Wednesday as the embattle Chinese Yuan edged marginally higher while trade talks between the US and Europe appear to have eased tensions and fears for an all-out trade war. President Trump and EU President Juncker met in Washington with both sides allowing concessions in an agreement that is hoped will ease trade barriers.

With risk appetite bolstered the Kiwi drove toward three-week highs punching through resistance at 0.6820 and testing firmer technical opposition at 0.6850. Attentions now turn to US GDP data Friday for broader macroeconomic direction while ongoing currency and trade hostilities drive short term demand for risk. With the majority of investors posting net shorts against the NZD we expect upside gains will remain hard won with moves toward and above 0.6850 likely to meet profit taking, however a break above this handle opening the door for a run back toward 0.6950 and 0.70.

 

 

 

  British Pound

GBP / AUD Expected Range: 1.7620 – 1.7790

The Great British Pound is slightly stronger again this morning when valued against its US counterpart reaching a 24-hour high of 1.3200 on the back of strong local data and overall US dollar weakness.

On the data front yesterday the CBI (Confederation of British Industry) Realized Sales survey dropped 20 points, but still beat the estimate 16 points. Retail sales growth remained strong in July but well below the previous month 32 points. There are no macroeconomic releases scheduled on Thursday.

From a technical perspective, the GBP/USD pair is currently trading at 1.3190. We continue to expect support to hold on moves approaching 1.3040 while now any upward push will likely meet resistance around 1.3200.

 

 

 

  United States Dollar

AUD / USD Expected Range: 0.7350 – 0.7480

The United States Dollar is weaker across the board over the past 24 hours with the US Dollar Index falling 0.4% against a basket of currencies. The big headline came out of Europe this time with conciliatory comments from President Trump after his press conference with EU President Juncker. In China, the media continues to report on further, targeted measures by the PBOC on capital requirements for banks. Ultimately, the improved global conditions saw capital return to risky assets and the Greenbacks counterparties marginally rise against the Dollar.

Ahead of their much-anticipated meeting on trade, President Trump held a joint press conference with President Juncker saying “we expect something very positive” to come of the meeting. Despite the lack of real information, the market reacted positively to the initial press conference on the hope of reconciliation. The Euro in-particular accelerated northward with the Great British Pound also finding its feet to near weekly highs. Nevertheless, auto tariffs remain a point of contention with reports of both sides considering tariff options. In Asia, the other target of US trade aggression China, looks to further ease policy measures to encourage growth with the latest announcement from the PBOC. The PBOC was reported to have eased counter-cyclical capital requirements for banks in an attempt to boost lending. The positive moves by China to encourage growth had a significant impact on commodity currencies with the Aussie in-particular pushing two-week highs.

In the day ahead, market focus will continue to likely be on the Trump-Juncker trade discussions.

 

 

 

  Euro

AUD / EUR Expected Range: 0.6300 – 0.6380

EURUSD spiked 0.40% to 1.1735 amid the recent agreement reached by the US and the European Union. Trump announced that the EU will be expanding lng (gas) and soybean imports from the US and both countries will be reducing industrial tariffs.

The EURUSD broke and stayed above the 1.1720 resistance level, a bullish short-term signal. Markets will be closely watching Tonight’s ECB rate decision and tomorrow’s US 2Q GDP release for further hints on where to go from here.

The Q&A session following the ECB decision is generally a volatile event so keep an eye on price action around 1.1680 and 1.1780.

 

 

 

  Canadian Dollar

AUD / CAD Expected Range: 0.9650 – 0.9780

The loonie had the best performance among other major currencies versus the dollar, strengthening 0.90% as USDCAD dropped to 1.3041.

Continued oil WTI strength and optimistic headlines around the NAFTA agreement brought further support for the CAD and spot was able to break through the 1.3110 support with ease.
It now seems like we have entered into a new range between 1.30 and 1.31 which will probably be tested as the ECB meeting resumes and the market gets a sneak peak of the US economy with 2Q GDP.

 

 

 

Posted by OFX

Trade tensions cool ahead of ECB rate decision

OFX Daily Market News

Securities Identifier YHOO NYSE

Posted by OFX

  British Pound

GBP/USD has reclaimed the 1.32 handle overnight as trade tensions were cooled by a meeting between US President, Donald Trump and EU Commissioner, Jean-Claude Juncker in Washington. Stock markets rose on the news that there will be no further trade tariffs imposed by Trump on EU goods whilst talks on trade are ongoing, halting fears that the European car industry was the next target of Trumps tariff blitz. Sterling is now trading around a ten day high against the dollar having briefly traded below 1.30 at the end of last week, the reduction in trade tensions and a gradual pricing in of a rate hike next week by the Bank of England are helping push the pound higher.

 

 

 

  United States Dollar

GBP / USD Expected Range: 1.3130 – 1.3260

The positive news re: Trump and the EU re: trade has seen some dollar weakness hit the market overnight. With the US economy continuing to perform well despite Trumps aggressive trade rhetoric traders seemed happy to hold the greenback as the impact of his acts was seemed more likely to affect overseas markets more than the US. Now that Trump has dialed back some of his intended measures the dollar has fallen as markets breathe a sigh of relief. To highlight this move USD/JPY, which normally falls on rising trade tensions as markets seek the sanctuary of the yen has dropped on the good news from Washington. Data-wise today sees Durable Goods Orders m/m from America with a 3% rise expected. This week’s big news from the States is tomorrows Q2 GDP print with a strong number expected as the US economy continues to perform well despite Trumps aggression re: trade.

 

 

 

  Euro

GBP / EUR Expected Range: 1.1190 – 1.1305

The main event from the markets today is the ECB interest rate decision due at 12:45pm. No change of policy is almost guaranteed so the markets focus will be on ECB chief, Mario Draghi’s press conference 45 mins later. With the phasing out of its QE programme confirmed at last month’s get-together it seems unlikely we see any big clues dropped by the bank re: the timing of rate hikes with the “mid 2019” mantra likely to be repeated. EUR/USD has pushed back through 1.17 on the positive news from Washington with GBP/EUR continuing to be range bound sitting around 1.1250 currently.

 

 

 

  Australian Dollar

GBP / AUD Expected Range: 1.7680 – 1.7820

Risk on trade helped AUS/USD push higher during the US session yesterday afternoon rising to a high of .7565 overnight. The next big move for the commodity currencies will likely be tomorrows GDP print from the States. Any shortfall in output from the US will reduce the chances of four rate hikes from the Fed this year benefitting the dollars trading pairs across the board. The next print of note from Down Under is next Thursday nights Retail Sales number however this is sandwiched between the FOMC decision and the US Jobs Report so any impact will likely be drowned out by these two big events. GBP/AUD sits at 1.7750.

 

 

 

  Canadian Dollar

GBP / CAD Expected Range: 1.7130 – 1.7265

USD/CAD has fallen below 1.31 as the dollar sell-off benefitted the loonie which also has been bolstered by rising crude oil prices. Brent is pushing back towards $75 a barrel for the first time in ten days providing the local dollar a tailwind. CAD is at a six-week high and close to breaking below 1.30 in what would be a bullish signal for the local dollar. These gains may be short-lived however should US growth numbers beat forecast tomorrow. GBP/CAD is at 1.72.

 

 

 

  New Zealand Dollar

GBP / NZD Expected Range: 1.9230 – 1.9355

NZD/USD has risen through .68 on the cooling of trade tensions between the US and the EU. The next big local event for the kiwi will be Monday nights ANZ Business Confidence survey which posted a fairly miserable -39 last time, the second worst reading in nine years. Trade tensions are doing little to help new PM Jacinda Arderns government which has come under scrutiny from the markets of late as she looks to increase public sector spending. GBP/NZD trades around 1.93 this morning.

 

 

 

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Global Markets Signal Support of Juncker and Trump's Desire to Curb Trade Tensions

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Securities Identifier YHOO NYSE

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  United States Dollar

The United States Dollar is weaker across the board over the past 24 hours with the US Dollar Index falling 0.4% against a basket of currencies. The big headline came out of Europe this time with conciliatory comments from President Trump after his press conference with EU President Juncker. In China, the media continues to report on further, targeted measures by the PBOC on capital requirements for banks. Ultimately, the improved global conditions saw capital return to risky assets and the Greenbacks counterparties marginally rise against the Dollar.

Equity markets are mixed this morning in North America with the S&P 500 and Nasdaq pointing to negative territory on futures and the TSX and Dow Jones signaling to a positive open. The European market is trading on the positive side as the Trump-Juncker talks showed trade tensions easing as both sides making concessions. Trump backed off on European auto tariffs and Juncker said the EU would expand imports of soybeans and LNG from the United States.

US economic data saw Durable Goods Orders miss expectations of 3% printing an actual of 1%, the Goods Trade Balance saw a slightly better reading than the previous -64.77B to -63.33B. US weekly initial jobless claims rose from 208K to 217K reaction to the data was muted as ECB announced its plan to stay the course on ending its bond purchasing program this year the euro fell against the greenback after the announcement. EURUSD support now sits at 1.1688 while resistance is firmly imprinted at 1.1755.

 

 

 

  Canadian Dollar

USD / CAD Expected Range: 1.3029 – 1.3114

The Canadian dollar again trades on broader market sentiment. As Trump and Juncker voice the desire to easy trade tension by curbing tariffs, steel and aluminum are still in question on tariff easing. The USDCAD currency pair tested new support levels at 1.3029 while resistance now sits at 1.3114.

USD/CAD trades below resistance of 1.3114 as the dollar sell-off yesterday benefitted loonie which also was bolstered by rising crude oil prices. WTI pushing back towards $70 a barrel for the first time in seven days providing the loonie a tailwind. CAD is at a six-week high was close to breaking below 1.30 in what would be a bullish signal for the Canadian dollar. These gains may be short-lived however should US growth numbers beat forecast tomorrow.

 

 

 

  Euro

EUR / USD Expected Range: 1.1661-1.1744

The main event from the markets today is the ECB interest rate decision due at 7:45 am. No change of policy is almost guaranteed, so the market’s focus will be on ECB chief, Mario Draghi’s press conference 45 mins later.

With the phasing out of its QE programme confirmed at last month’s get-together, it seems unlikely we see any big clues dropped by the bank re the timing of rate hikes with the “mid-2019” mantra likely to be repeated. EUR/USD has pushed back through 1.17 on the positive news from Washington with GBP/EUR continuing to be range bound sitting around 1.1250 currently.

 

 

 

  British Pound

GBP / USD Expected Range: 1.3153-1.3213

GBP/USD has reclaimed the 1.32 handle overnight as trade tensions were cooled by a meeting between US President, Donald Trump and EU Commissioner, Jean-Claude Juncker in Washington. Stock markets rose on the news that there will be no further trade tariffs imposed by Trump on EU goods whilst talks on trade are ongoing, halting fears that the European car industry was the next target of Trump’s tariff blitz.

Sterling is now trading around a ten-day high against the dollar having briefly traded below 1.30 at the end of last week, the reduction in trade tensions and a gradual pricing in of a rate hike next week by the Bank of England are helping push the pound higher.

 

 

 

  Australian Dollar

AUD / USD Expected Range: 0.7400-0.7463

The Australian Dollar has found some upside when valued against its US counterpart over the past 24 hours, trading as high as 0.7464 just at the end of the New York session. However, it wasn’t all good news intraday with the release of Australian CPI figures, headline inflation remained flat at 0.4% q/q which was below expectations and headline inflation moved just into the RBA’s target range of 2-3% at 2.1% y/y. The trimmed mean which is the RBA’s preferred measure edged down 0.5% q/q while was on a y/y basis at 1.9% y/y – still just under the target band hence why we initially saw a high of 0.7448 just after 11.30 AEST and then a quick pullback thereafter. Traders continued to sell the Aussie and as we closed the Asian session and we were back under 74c again. Market pricing is implying that the cash rate will remain unchanged for a considerable period of time, with a less than 50% chance of a hike in the next 12 months.

The local unit buoyed by risk appetite in the markets after Trump and EU Junker struck a deal to increase trade, reduce tariffs and costs, and increase U.S. farm and natural gas exports to Europe in order to avert an all-out trade war between the two.

Looking ahead, we have the release of Import Prices by the Australian Bureau of Statistics which measures the change in the price of goods purchased by importers. The data contributes to inflation for both businesses and consumers. We are expecting to see an increase on 1.9% on the previous 2.1% while the Export Price Index is expected at 3.9% (previous 4.9%). The data is unlikely to drive much action, support sitting at 0.7400 and resistance up at 0.7490.

 

 

 

  New Zealand Dollar

NZD / USD Expected Range: 0.6800-0.6851

The New Zealand dollar rallied overnight jumping back through 0.68 to touch highs at 0.6842 as the US dollar fell against G-10 counterparts. The Kiwi shook off a softer than anticipated trade balance print and found support through Wednesday as the embattled Chinese Yuan edged marginally higher while trade talks between the US and Europe appear to have eased tensions and fears for an all-out trade war. President Trump and EU President Juncker met in Washington with both sides allowing concessions in an agreement that is hoped will ease trade barriers.

With risk appetite bolstered the Kiwi drove toward three-week highs punching through resistance at 0.6820 and testing firmer technical opposition at 0.6850. Attentions now turn to US GDP data Friday for broader macroeconomic direction while ongoing currency and trade hostilities drive short-term demand for risk. With the majority of investors posting net shorts against the NZD we expect upside gains will remain hard won with moves toward and above 0.6850 likely to meet profit-taking, however, a break above this handle opening the door for a run back toward 0.6950 and 0.70.

 

 

 

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Commodity-Based Currencies Gain on Chinese Central Bank Stimulus Plan.

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  Canadian Dollar

The USDCAD continued trading within the short-term range of the last sessions, but the CAD managed to close 0.12% stronger versus the USD at 1.3155.

The USD ended the day relatively unchanged versus a basket of major currencies, but commodities and resource-based currencies performed well against the USD amid China’s fiscal stimulus plan. The PBOC also mentioned measures to ease monetary policy and ramp up fiscal policy. China did fall short of announcing a big stimulus package, but nevertheless, the direction was clear, and the market responded accordingly. Chinese equities were boosted by approximately 5% since Friday with commodity prices also benefiting.

With a very light week on the economic data front for Canada, market participants are paying close attention to resuming NAFTA negotiations. Foreign Affairs Minister Chrystina Freeland is in Mexico meeting with outgoing and incoming counterparts after talks were stalled for the July 1st Mexican Presidential elections. Trump has threatened to scrap NAFTA and put together singular deals for Canada and Mexico, also saying that he would prioritize a Mexican agreement first.

 

 

 

  United States Dollar

USD / CAD Expected Range: 1.3071 – 1.3157

Risk sentiment took another twist in overnight trading with the market responding actively to rebounds in commodity markets and equities in China. The risk-on environment led to a marginal softening of the Greenback with the US Dollar Index now treading water at 94.61, a measly 0.02% lower. Ultimately, however, commodity currencies are higher against the United States Dollar with most other majors remaining relatively flat.

President of the European Commission Jean-Claude Junker and EU Trade Commissioner Cecilia Malmstrom will meet with President Trump in Washington today. A bilateral agreement between the EU and the U.S. on trade is the agenda. Trump did tweet last night that both sides should eliminate all tariffs. Market participants see the tweet complicating the negotiations as neither side is at that point on resolving the fight over tariffs.

 

 

 

  Euro

CAD / EUR Expected Range: 0.6502-0.6528

As mentioned earlier, tomorrow sees the latest ECB interest rate decision with no change all but guaranteed from the Governing Council. It’s unlikely there will be any hints with regards to the timing of future rate hikes other than they will occur mid-2019. As we approach August things will likely quieten down as they generally do over the holiday period however there is always Donald Trump to keep people on their toes! This morning’s one print of note has been a slightly better than expected German IFO Business Climate survey which came in at 101.7 rather than 101.6 predicted. The survey has taken a big leg down of late printing 114.7 in March before dropping to 102.1 in April as Trump-fueled trade concerns weigh on German business sentiment. GBP/EUR is a little higher currently trading around 1.1245.

 

 

 

  British Pound

CAD / GBP Expected Range: 0.5775-0.5803

Sterling has continued to rally throughout the past 24 hours following last week’s drop below 1.30 against the dollar. With a lack of fundamental data this week from the UK, traders may be eyeing up next week’s interest rate decision from the Bank of England and starting to price in a hike. Another small crumb of comfort may report that UK PM, Theresa May is set to take charge of Brexit negotiations going forward. With former Brexit Secretary, David Davis resigning in the wake of the new plan for future trade/customs being revealed it appears the PM will be taking a more assertive role alongside new Brexit Secretary, Dominic Raab. We could see a (very) limited recovery in sterling over the next six weeks as parliament has its summer break and Brexit news thins out a little however we are now only three months before a future trade/customs plan is meant to have been thrashed out by so it could just be a temporary reprieve. GBP/USD is back above 1.3150.

 

 

 

  Australian Dollar

CAD / AUD Expected Range: 1.0219-1.0290

The Australian Dollar throughout Tuesday’s Asian session remained under pressure and stayed below 74c on the back of renewed US Dollar buying interest. However, an advance in both Copper and Zinc prices both up more than 2% pushed the AUD/USD pair through short-term resistance touching an eventual high of 0.7434 in the early hours of New York. The Aussie led the advance in the G10 currencies and performed the best moving from a low of 0.7360 to a high of 0.7434.

With no significant data releases yesterday, investors remained mindful of Trump’s displeasure over the Fed’s monetary tightening claiming that their plans to raise U.S. interest rates risked undermining his efforts at strengthening the economy.

All eyes will be focused today on Consumer Price Index (CPI) figures which should freshen the debate as to when the RBA is likely to raise rates again. The headline reading for inflation is expected to pick up in the second-quarter of 2018. Markets are waiting to see a small jump from 0.4% to 0.5% q/q and 2.3% y/y. This would put the inflation rate back within the confines of the RBA’s 2% to 3% target band.

 

 

 

  New Zealand Dollar

CAD / NZD Expected Range: 1.1165-1.1214

The New Zealand dollar pushed back through 0.68 U. S. cents as risk appetite gained broader traction on news China will support easing monetary policy and increase fiscal stimulus into the end of the year. Equities have rebounded some 5% since Friday’s close, and the yuan stabilized above 13-month lows allowing the Kiwi to shrug off yesterday’s softening and push back toward resistance at 0.6820.

While one of the day’s top outperformers the Kiwi still struggled to push through key technical stops and faltered on approaches nearing 0.6820. Much like its antipodean counterpart the NZD appears largely range bound constrained by broader global trends and longer-term expectations of neutral monetary policy.

With support at 0.67-0.6720 attentions turn to June’s trade balance print today for short-term guidance. Anything short of a $200million surplus could put pressure on the Kiwi and prompt a shift back below 0.68.

 

 

 

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Trump and Junker Meeting in Washington to Discuss Tariffs

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  United States Dollar

Risk sentiment took another twist in overnight trading with the market responding actively to rebounds in commodity markets and equities in China. The risk-on environment led to a marginal softening of the Greenback with the US Dollar Index now treading water at 94.61, a measly 0.02% lower. Ultimately, however, commodity currencies are higher against the United States Dollar with most other majors remaining relatively flat.

President of the European Commission Jean-Claude Junker and EU Trade Commissioner Cecilia Malmstrom will meet with President Trump in Washington today. A bilateral agreement between the EU and the U.S. on trade is the agenda. Trump did tweet last night that both sides should eliminate all tariffs. Market participants see the tweet complicating the negotiations as neither side is at that point on resolving the fight over tariffs.

 

 

 

  Canadian Dollar

USD / CAD Expected Range: 1.3071 – 1.3157

The USDCAD continued trading within the short-term range of the last sessions, but the CAD managed to close 0.12% stronger versus the USD at 1.3155.

The USD ended the day relatively unchanged versus a basket of major currencies, but commodities and resource-based currencies performed well against the USD amid China’s fiscal stimulus plan. The PBOC also mentioned measures to ease monetary policy and ramp up fiscal policy. China did fall short of announcing a big stimulus package, but nevertheless, the direction was clear, and the market responded accordingly. Chinese equities were boosted by approximately 5% since Friday with commodity prices also benefitin

With a very light week on the economic data front for Canada, market participants are paying close attention to resuming NAFTA negotiations. Foreign Affairs Minister Chrystina Freeland is in Mexico meeting with outgoing and incoming counterparts after talks were stalled for the July 1st Mexican Presidential elections. Trump has threatened to scrap NAFTA and put together singular deals for Canada and Mexico, also saying that he would prioritize a Mexican agreement first.

 

 

 

  Euro

EUR / USD Expected Range: 1.1676-1.1712

As mentioned earlier, tomorrow sees the latest ECB interest rate decision with no change all but guaranteed from the Governing Council. It’s unlikely there will be any hints with regards to the timing of future rate hikes other than they will occur mid-2019. As we approach August things will likely quieten down as they generally do over the holiday period however there is always Donald Trump to keep people on their toes!

This morning’s one print of note has been a slightly better than expected German IFO Business Climate survey which came in at 101.7 rather than 101.6 predicted. The survey has taken a big leg down of late printing 114.7 in March before dropping to 102.1 in April as Trump-fueled trade concerns weigh on German business sentiment. GBP/EUR is a little higher currently trading around 1.1245.

 

 

 

  British Pound

GBP / USD Expected Range: 1.3138-1.3178

Sterling has continued to rally throughout the past 24 hours following last week’s drop below 1.30 against the dollar. With a lack of fundamental data, this week from the UK traders may be eyeing up next week’s interest rate decision from the Bank of England and starting to price in a hike. Another small crumb of comfort may report that UK PM, Theresa May is set to take charge of Brexit negotiations going forward. With former Brexit Secretary, David Davis resigning in the wake of the new plan for future trade/customs being revealed it appears the PM will be taking a more assertive role alongside new Brexit Secretary, Dominic Raab.

We could see a (very) limited recovery in sterling over the next six weeks as parliament has its summer break and Brexit news thins out a little however we are now only three months before a future trade/customs plan is meant to have been thrashed out by so it could just be a temporary reprieve. GBP/USD is back above 1.3150.

 

 

 

  Australian Dollar

AUD / USD Expected Range: 0.7392-0.7449

The Australian Dollar throughout Tuesday’s Asian session remained under pressure and stayed below 74c on the back of renewed US Dollar buying interest. However, an advance in both Copper and Zinc prices both up more than 2% pushed the AUD/USD pair through short-term resistance touching an eventual high of 0.7434 in the early hours of New York. The Aussie led the advance in the G10 currencies and performed the best moving from a low of 0.7360 to a high of 0.7434.

With no significant data releases yesterday, investors remained mindful of Trump’s displeasure over the Fed’s monetary tightening claiming that their plans to raise U.S. interest rates risked undermining his efforts at strengthening the economy.

All eyes will be focused today on Consumer Price Index (CPI) figures which should freshen the debate as to when the RBA is likely to raise rates again. The headline reading for inflation is expected to pick up in the second-quarter of 2018. Markets are waiting to see a small jump from 0.4% to 0.5% q/q and 2.3% y/y. This would put the inflation rate back within the confines of the RBA’s 2% to 3% target band.

 

 

 

  New Zealand Dollar

NZD / USD Expected Range: 0.6786-0.6821

The New Zealand dollar pushed back through 0.68 U. S. cents as risk appetite gained broader traction on news China will support easing monetary policy and increase fiscal stimulus into the end of the year. Equities have rebounded some 5% since Friday’s close, and the yuan stabilized above 13-month lows allowing the Kiwi to shrug off yesterday’s softening and push back toward resistance at 0.6820.

While one of the day’s top outperformers the Kiwi still struggled to push through key technical stops and faltered on approaches nearing 0.6820. Much like its antipodean counterpart the NZD appears largely range bound constrained by broader global trends and longer-term expectations of neutral monetary policy.

With support at 0.67-0.6720 attentions turn to Junes trade balance print today for short-term guidance. Anything short of a $200million surplus could put pressure on the Kiwi and prompt a shift back below 0.68.

 

 

 

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The Market Direction Remains Fixated on Trade Tensions

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  United States Dollar

Having touched 12-month highs the U.S Dollar index moved sharply lower following President Trump’s proclamation of concern regarding the strong performance of the world’s base currency. Trump suggested the “strong currency was putting the United States at a disadvantage, making our exports more expensive.” The comments forced the Dollar downward against Yen touching 1-week lows while the Euro bounced back through 1.16 advancing some 100 points having touched intraday lows at 1.1576.

This is not the first time Trump has voiced his displeasure with the strength of the US Dollar, however, his attack on the Federal Reserve and its policy of monetary policy tightening, a core driver of recent USD strength, raising concerns as to the independence of the Federal Reserve. Having fallen one tenth of a percent, the dollar correction was contained mainly as investors assessed the likelihood the President would weigh in and disrupt the sovereignty of the FOMC and Federal Reserve, however, Trump’s comments add another variable that needs to be considered when assessing long-term expectations.

Attentions remain squarely fixed on political pressures with little macroeconomic data on hand to drive broader direction into the close.

  Canadian Dollar

USD / CAD Expected Range: 1.3072 – 1.3157

The loonie couldn’t capitalize on the Trump Headlines and the subsequent USD correction, ending the session 0.8% weaker with USDCAD closing above the critical 1.3250 level at 1.3273. Recent NAFTA Headlines signaling the US might be keen to negotiate the agreement first with Mexico haven’t been CAD supportive, but the USDCAD was still trading below 1.32 during the Asian session.

As the European session started with UK missing on Retail sales data and CNH continuous weakening, the USD gained momentum. The CAD was then pressured downward following US Auto tariffs prospects and a weak ADP Canadian employment report (-10.5k jobs in June). USDCAD reached a new monthly high at 1.3290 before correcting slightly to 1.3273 after Trump headlines.

The Canadian dollar opens the North American session a full percent higher against the US dollar. The catalysts that have given the loonie strength today were positive Retail Sales and inflationary numbers. Retail Sales for May posted 2.0% vs. estimates of 1.1% and CPI year over year for June printed at 2.5% vs. previous of 2.2%. The robust economic fundamentals have given market participants room to factor in a more probable cause for the Bank of Canada to raise interest rate hikes at the end of the year.

  Euro

EUR / USD Expected Range: 1.1626 – 1.1715

The EURUSD ended the session slightly higher at 1.1642 after being down more than 0.60%, below the critical 1.16 level, at 1.1575. It was all USD strength that followed through the Asian session on some risky Headlines coming from China plus the continuation of CNH depreciation and then the robust US Jobless numbers. Enter Trump. Someone released some Headlines from an interview with the US President, that’ll be published later today, stating that he was “not thrilled” about the Fed hiking rates and the subsequent USD strength against the Euro, and the Chinese currency. Euro jumped more than 0.6% to 1.1678 on the news before reversing gains and settling below 1.1650.

Levels to watch, in the short term, we should focus on Yesterday’s high/low 1.1575/1.1678

  British Pound

GBP / USD Expected Range: 1.2995 – 1.3084

The torrid week for sterling continues. Having flirted with 1.33 against the USD on Monday morning yesterday’s disappointing retail sales figures saw it bounce off mid 1.29 instead. All in all the pound has lost nearly 2.5% of its value against the USD whilst it has also finally broken out of its narrow trading range against the Euro.
World Cup spending on alcohol and BBQ food couldn’t offset the drop in spending elsewhere and once again the headline figures has contracted for a third time this year as retailers flocked away from traditional storefronts with the good weather tempting people outside. Any gains that sterling made against the Euro in March and April have slowly eroded with GBP/EUR hitting 19 week lows. Similarly GBP/USD has hit fresh 10 month lows.

What does this mean moving forward, and is there any reprieve for the pound? Well, with a Bank of England interest rate decision just around the corner (August 2nd) the market was pricing in around an 83% chance of a hike at the start of the week but this could be thrown up in the air. The only hope for sterling bulls and Bank of England interest rate hawks is that private consumption only plays a small part in the UK’s GDP figures and it has always been a volatile figure to forecast.

  Australian Dollar

AUD / USD Expected Range: 0.7318 – 0.7413

The Australian Dollar opens this morning marginally lower than yesterdays’ open as commodity currencies underperformed in overnight trading. It was a wild ride for the Aussie, which initially saw very positive employment figures drive up its value to 0.7441, only for the American trading session to unwind those gains and then some. Changing hands this morning at 0.7357, the Aussie looks to tread water to close out the working week.

The big headline of the day was, of course, the 50.9k jobs that were added to the Australian economy. The news soundly beat all analyst expectations and saw the Australia Dollar appreciate significantly to 0.7441. From there it was a day to forget with the industrial metal prices reflecting slowing growth concerns in China. Copper fell 1.5%, taking its declines since the start of June to 17%. Zinc, Nickel and Lead prices also slid in the decidedly bearish market. Compounding, the commodity concerns was the softness of the Chinese Yuan which hit a new low for the year. Overall, the Aussie fell over 1.5% from its high at 0.7441.

Looking forward, the Aussie is set to enjoy a quiet domestic calendar to close out the week, a welcome environment considering the recent trading. Off-shore, risk-events are relatively limited with attention mainly focused on the G20 summit kicking off today in Buenos Aires.

  New Zealand Dollar

NZD / USD Expected Range: 0.6720 – 0.6799

The New Zealand Dollar could not sustain movements above the 68 US cent handle, opening at 0.6795 yesterday morning as US Dollar strength continued its momentum. The US Dollar index (DXY) reached new highs overnight after a robust Philly Fed Manufacturing print and United States unemployment claims, causing the NZD/USD cross to fall steadily back to intraday lows of 0.6715.

A sharp spike higher though for the Kiwi occurred during the North American session as President Donald Trump in an interview with CNBC said that a stronger dollar “puts us at a disadvantage” and is currently unhappy with the current Federal Reserve monetary policy tightening.

The Kiwi rebounded to 0.6760 following Trump’s comments before drifting lower on open this morning to 0.6745. With only Visitor arrival numbers released domestically this morning, markets will look towards G20 meetings in Buenos Aires this weekend for further stance on simmering trade tensions.

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