FX News Today
- Asian stocks traded mixed in a thin trade.
- The RBA left the cash rate at a record low 1.00%, as anticipated, though the statement pointed to tentative signs of improvement in the Australian economy’s fortunes, which helped spark about a 30 pip rebound in the Aussie.
- A Bloomberg reporter highlighted the difficulties in arranging the talks that are supposed to restart this week after the US rejected Beijing’s request to delay the start of tariffs that came into effect over the weekend.
- Against that background stock markets struggling to make headway JPN225 still managed gains of 0.1% respectively, but the Hang Seng declined -0.24%.
- US futures are equally heading south with the USA100 leading the way.
- Argentina imposed capital controls at the start of the month.
- Brexit: The anti-no-deal opposition are preparing a vote today to take control of the parliamentary timetable, which would pave the way for them to stage a vote the following day, Wednesday, on proposed legislation that would stop a no-deal Brexit. Prime Minister Johnson has made it clear that he will call a general election if such legislation were passed, which, according to reports, would be staged on October 14.
- In Europe, BTPs continue to outperform as political jitters abate with Salvini sidelined for now.
- GER30 futures recovered earlier losses and are posting slight gains, while the UK100 is outperforming, underpinned by a weaker Pound.
- The WTI future is trading at USD 54.85 per barrel.
Charts of the Day
Technician’s Corner
- JPY: The Yen printed respective 29-month and 10-year lows versus the Euro and Australian Dollar at the open of trading in Asia-Pacific session, then rebounding some before settling. USDJPY is near net unchanged of the day at 106.15 after carving out a two-session low at the open in Asia, at 105.93.
- GBP: Sterling racked up losses of nearly 1% against the Dollar, Euro and Yen, as of levels prevailing at the London fixing. Cable broke the 3-week low and the round 1.2000 area and posted a 1.1992 low, for the first time since January 2017, which, aside from a broadly firmer Dollar, has been a consequence of Pound underperformance.
- EUR: EURUSD concurrently ebbed to a new 28-month low at 1.0930 in what is now the pair’s seventh consecutive day of printing lower lows. The pairing is down by 1.3% from week-ago levels.
- CAD: The USD also managed to touch a two-and-a-half month peak against the Canadian Dollar in a move exaggerated in magnitude by the unusual thinness of the USDCAD market. The pair’s high was printed at 1.3361 yesterday after buy-stop orders were tripped during the London morning session. The pairing subsequently ebbed back to around 1.3330.
Main Macro Events Today
- ECB’s Nominated President Lagarde speech (EUR, GMT 07:00)
- ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to rise to 51.4 in August from 51.2 in July, compared to a 14-year high of 61.4 in August of last year.
Support and Resistance levels
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Andria Pichidi
Market Analyst
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