Daily FX Wrap: Buck rocks G10 peers but Kiwi feels further reprieve.

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DAILY FX WRAP

DXY

The Index has faded earlier gains and is now set to end the EU session flat and just below the 99.00 mark after eclipsing recent highs of 99.10. Downside in the index coincided with the US market entrance.

DXY is poised to end the session flat after having fluctuated within a 98.83-99.13 intra-day band ahead of its YTD high at 99.37. Data wise, little sustained reaction was experienced after mixed final GDP, PCE Prices, initial jobless claims and adv goods trade balance metrics.

In terms of commentary WH Economic Advisor Kudlow stated the domestic economy has reached a turning point back up, although this did little to influence the Index with markets still awaiting any details on the impeachment front. Tomorrow’s State-side calendar sees Core PCE, Durable Goods, University of Michigan (final), Fed’s Quarles (voter) and Harker (non-voter), albeit the latter will be speaking on economic outlook at the Shadow Open Committee.

NZD, AUD

Kiwi remains the marked G10 out-performer and NZD/USD has reclaimed a 0.63+ status as the Buck eased, although the bulk of the support emanated from RBNZ Governor Orr who struck an optimistic tone on the domestic economy whilst highlighting that unconventional policy tools are not currently necessary, which is likely to have also influenced some short covering. Meanwhile its Aussie counterpart has been kept afloat from this European morning’s more constructive and less resilient tone from China’s MOFCOM. NZD/USD is on track to end the EU session near session highs having thus far fluctuated within a 0.6267-6327 range whilst AUD/USD is poised to end the session in the green having visited intraday lows of 0.6750 and a high of 0.6780.

EUR, GBP

Euro is set to end the EU session with flat and Sterling with modest losses. Cable earlier tested 1.2300 to the downside as DXY printed fresh weekly highs and amid Brexit angst as the UK PM remains resilient to an extension, whilst rhetoric from the EU is also less optimistic as most diplomats believe another delay will only increase the chances of no-deal in the future.

Meanwhile, MPs have voted to reject a three-day recess next week, which would have allowed the Tories to hold their annual Party Conference, although a spokesperson noted that the conference will go ahead as usual. GBP/USD is back below the 1.2350 mark and its 21 DMA at 1.2346 having fluctuated between at 1.2300-80 intraday band.

Elsewhere, the Euro was at the whim of the Dollar which saw EUR/USD at a fresh YTD and 28-month low of 1.0923 ahead of the psychological 1.0900 and a Fib at 1.0864.

JPY, CHF

Again, influenced by the Dollar.

The safe havens look set to end the EU session modestly firmer/flat. USD/JPY hovers around 107.50 and remained within am intraday band of 107.40-79 whilst USD/CHF climbed off lows of 0.9910 (vs. high 0.9950) but looks to end the session little changed intraday.

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