The Dollar and Yen are softer, with both currencies continuing to correlate inversely with global stock market direction. EURUSD posted a four-day high at 1.1694, extending the rebound from the two-month low that was seen last Friday at 1.1612, and EURJPY lifted to an eight-day peak at 123.50.
.
Cable and GBPJPY have seen a similar price action. The Pound outperformed yesterday on encouraging signs about EU and UK trade negotiations, which comes with the final week of talks having commenced in Brussels. The London Times reported that the EU has dropped its demand for a broad agreement to be reached on all outstanding areas of dispute (fishing rights and state aid) before drafting a final agreement, and in a significant sign of progress, that this week’s talks will include extra sessions that will focus on the sticking points. What’s clear is that Boris Johnson’s political high jinks (introducing proposed legislation that would allow the UK government to unilaterally overwrite parts of the EU Withdrawal Agreement) haven’t thrown a wrench in the negotiating works as had been feared. What remains unclear is how extensive a deal the two sides will come up with, assuming that the no-deal risk is now much reduced.
Elsewhere, USDJPY remained settled in the mid 105.00s. AUDJPY rose into six-day high terrain, while AUDUSD also gained. The Aussie Dollar has been rising concomitantly with an abatement in RBA easing expectations. The Oct ASX 30-day interbank cash rate futures closed in Sydney at 99.880, indicating a 64% expectation for the RBA to cut the official cash rate by 25 bp to 0.00% at the upcoming board meeting on October 6. This is down from the 77% implied odds that was seen last week.
Click here to access the Economic Calendar
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
