Brexit and Economic Data Put the GBP and USD in Focus

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session this morning.

New Zealand 3rd quarter inflation figures provided the Kiwi Dollar with direction early in the session.

Outside of the stats, positive updates on Brexit and U.S corporate earnings failed to support risk sentiment early on.

For the Kiwi Dollar

The annual rate of inflation eased from 1.7% to 1.5% in the 3rd quarter, while coming in ahead of a forecast of 1.4%. Quarter-on-quarter, consumer prices rose by 0.7%, following a 0.6% rise in the 2nd quarter. Economists had forecast a 0.6% increase.

According to NZ Stats,

  • Higher prices for rents and cigarettes and tobacco supported the 1.5% increase in the CPI, year-on-year.
  • The increase was partially offset by falling prices for vegetables, petrol, and telecommunications equipment.
  • Quarter-on-quarter, the 0.7% rise in consumer prices came off the back of price rises for local authority rates and payments, vegetables, and meat and poultry.
  • Falling prices for fruit, petrol, and new cars were negatives for the quarter.

The Kiwi Dollar moved from $0.62858 to $0.063125 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.21% to $0.6281.

Elsewhere

At the time of writing, The Japanese Yen was up by 0.14% to ¥108.71 against the U.S Dollar, while the Aussie Dollar was down by 0.21% to $0.6739.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized Italian and Eurozone inflation figures for September are due out later this morning, along with the Eurozone’s August trade figures.

Barring material deviation from prelims, the Eurozone’s trade data will likely have the greatest influence on the EUR.

Outside of the numbers, Brexit will continue to have an impact throughout the day.

At the time of writing, the EUR was down by 0.02% to $1.1031.

For the Pound

It’s a relatively busy day ahead on the data front. September inflation figures are due out later this morning.

We can expect the Pound to show greatest sensitivity to the annual rate of inflation and the Input Producer Price Index figures.

Direction for the Pound will ultimately come from Brexit updates, however. With the EU Summit now just 4-days away, time is rapidly running out.

Positive updates from the EU and the Brexiteers delivered more upside for the Pound at the start of the week. Expect plenty of volatility and a reversal should negative updates begin to filter through, however.

At the time of writing, the Pound was down by 0.28% to $1.2751.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. September retail sales figures are due out later today, along with August business inventory numbers.

Retail sales will have the greatest influence on the day. Consumer spending remains a key contributor and barometer to the U.S economy. Any unexpected slide in spending and expect the markets to balk as recession chatter continues to do the rounds.

On the geopolitical front, demand for the Dollar could rise should progress on Brexit negotiations hit a wall. Chatter from the Oval Office also needs monitoring throughout the day.

The Dollar Spot Index was up by 0.02% to 98.312 at the time of writing.

For the Loonie

It’s a busier day on the economic calendar, with September inflation figures due out later today. Expect the Loonie to react to today’s figures, with support likely to kick in should inflationary pressures build. The monthly movement in consumer prices will likely have the greatest impact.

With the BoC holding steady on the monetary policy front, inflation will need to hold steady at best.

The Loonie was down by 0.04% at C$1.3204, against the U.S Dollar, at the time of writing.

Brexit and Economic Data Keep the GBP and the EUR in Focus

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session this morning.

China’s September inflation figures provided direction ahead of finalized August industrial production figures out of Japan due out later this morning

In the early part of the day, the RBA also released its meeting minutes from last Tuesday’s meeting.

On the geopolitical front, sentiment towards the latest on the U.S – China trade talks and Brexit also influenced early on.

For the Aussie Dollar

Following last week’s rate cut, the RBA meeting minutes had limited influence on the Aussie Dollar. Salient points from the October Minutes included:

  • Risks to the global growth outlook remained tilted to the downside.
  • Businesses scaled back investment plans as a result of the technology and trade disputes between the U.S and China.
  • Further monetary policy easing was delivered to support employment and income growth and greater confidence that inflation would be consistent with the medium-term target.
  • Members noted that the unemployment and inflation outcomes were likely to fall short of forecasts in the near-term.
  • Subdued wage growth also suggested that spare capacity remained in the economy.
  • In spite of strong employment growth, however, the spare capacity remained, with employment growth expected to slow.
  • While lower interest rates could affect confidence, it would also support household cash flows and spending.
  • It was also noted that members were prepared to ease monetary policy further if needed.

The Aussie Dollar moved from $0.67694 to $0.067703 upon release of the minutes that preceded China’s inflation figures.

From China

The annual rate of inflation picked up from 2.8% to 3.0%, coming in ahead of a forecast of 2.9%. Month-on-month, consumer prices rose by 0.9%, coming in ahead of a forecasted and August 0.7%.

Wholesale fell further in September, however, with wholesale prices falling by -1.2% compared with September 2018. While in line with forecasts, the pace of deflation picked up from August’s 0.8%.

The Aussie Dollar moved from $0.67865 to $0.67849 upon release of the figures. At the time of writing, the Aussie Dollar was flat at $0.6775.

Elsewhere

At the time of writing, The Japanese Yen was up by 0.09% to ¥108.30 against the U.S Dollar, while the Kiwi Dollar was up by 0.11% to $0.6306.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Germany and the Eurozone’s ZEW economic condition figures are due out later this morning.

French finalized September inflation figures and Germany’s ZEW current conditions figures will likely have a muted impact on the EUR.

Outside of the numbers, we can expect direction to also come from Brexit as the Brexit clock ticks away.

At the time of writing, the EUR was up by 0.04% to $1.1031.

For the Pound

It’s a busy day ahead on the data front. August earnings and unemployment figures are due out along with September’s claimant count numbers.

We can expect the Pound to show greatest sensitivity to the wage growth and claimant count figures. Any unexpected rise in the unemployment rate, coupled with larger than anticipated increase in claimant counts would weigh heavily, however.

While we expect the stats to influence, Brexit will continue to be the key driver. A further pullback from Friday’s recent high should be expected should little progress be made on a deal.

At the time of writing, the Pound was up by 0.06% to $1.2616.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. October’s NY Empire State Manufacturing Index figures are due out later today.

With tariffs still in place, any further deterioration in manufacturing sector conditions would be negative.

Chatter from the Oval Office would require monitoring, however. There’s also Brexit to factor in, with any negative news considered Dollar positive.

The Dollar Spot Index was down by 0.04% to 98.417 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil prices later in the day.

The Loonie was up by 0.02% at C$1.3232, against the U.S Dollar, at the time of writing.

A Light Economic Calendar Puts the GBP and Brexit in the Limelight

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

China’s September trade figures provided direction at the start of the week.

On the geopolitical front, the Asian equity markets responded to the positive updates on Brexit and trade negotiations.

In the FX markets, however, the mood was less bullish. Existing punitive tariffs remain that suggest more doom and gloom before any pickup in economic activity.

From China

The U.S Dollar trade surplus widened from $34.84bn to $39.65bn in September. Economists had forecast a narrowing to $33.30bn.

  • Year-on-year, exports fell by 3.2%, which was worse than a forecasted 3.0% fall. In August, exports had fallen by 1.0%.
  • Imports fell by 8.5%, year-on-year, in September, which was worse than a forecasted fall of 5.2%. Imports had fallen by 5.6% in August.

The Aussie Dollar moved from $0.67760 to $0.67861 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.15% to $0.6784.

While the trade surplus widened, a slide in imports suggests waning demand that could spell trouble in the months ahead.

Elsewhere

At the time of writing, The Japanese Yen was down by 0.03% to ¥108.32 against the U.S Dollar, while the Kiwi Dollar was down by 0.49% to $0.6306.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. The Eurozone’s August industrial production figures are due out of the Eurozone.

Following an unexpected pickup Germany, forecasts are EUR positive.

Outside of the numbers, we can expect direction to also come from Brexit and any chatter on trade.

At the time of writing, the EUR was down by 0.13% to $1.1028.

For the Pound

It’s a quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will leave the Pound in the hands of Brexit chatter throughout the day. The EU Summit is now within sight and Boris Johnson has just days to finalize a deal with the EU.

Expect Pound sensitivity to Brexit chatter to remain heightened at the start of the week.

At the time of writing, the Pound was down by 0.59% to $1.2593. A lack of progress from the weekend weighed on the Pound early on.

Across the Pond

It’s also a quiet day ahead on the economic calendar. There are no material stats to provide the Greenback with direction on the day.

The lack of stats will leave geopolitics in focus. Any further easing in geopolitical risk would be considered Dollar negative.

The Dollar Spot Index was up by 0.14% to 98.436 at the time of writing. Support kicked in early as trade talks failed to lead to a removal of existing tariffs.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats out of Canada to provide the Loonie with direction.

We can expect market risk sentiment through the day to influence. Trade data out of China and no suggestion of the removal of existing tariffs were negatives early on.

The Loonie was down by 0.05% at C$1.3209, against the U.S Dollar, at the time of writing.

Trade Talks and Brexit Negotiations to Remain the Key Drivers

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

The Kiwi Dollar was in action, with September’s Business PMI and electronic card retail sales providing direction early on.

On the geopolitical risk front,  it was risk-on as the markets responded to positive updates from the U.S – China trade talks. There were also positive updates on Brexit negotiations, adding to the positive sentiment early in the day.

For the Kiwi Dollar

The Business PMI held steady at 48.4 September, falling short of a forecast of 49.0, according to the latest PMI Survey.

Electronic card retail sales rose by 0.4%, month-on-month, in September, following a 1.2% rise in August. Economists had forecast a 0.5% increase.

According to NZ Stats,

  • A 0.8% jump in spending on groceries and liquor provided support in September.
  • Spending on durables, including electronics, hardware, furniture and appliances and in the hospitality industries also supported. Both sectors saw a 0.4% rise in spending.
  • Weighing in September was a 4% fall in spending on clothes and shoes.

The Kiwi Dollar moved from $0.63181 to $0.63194 upon release of the figures. At the time of writing, the Kiwi Dollar up by 0.05% to $0.6323.

Elsewhere

At the time of writing, The Japanese Yen was up by 0.01% to ¥107.97 against the U.S Dollar, with the Aussie Dollar was up by 0.16% to $0.6772.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. with German, French and Spanish finalized September inflation figures due out.

Barring a deviation from prelim figures, the stats will unlikely have a material impact on the EUR.

On the geopolitical front, it’s France’s imposed deadline for Britain to deliver a viable alternative to the Irish backstop. We can expect movement across the majors as news filters through. There is also the U.S – China trade war to factor in.

At the time of writing, the EUR was up by 0.09% to $1.1015.

For the Pound

It’s a quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

The market focus on the day will be on Brexit as Boris Johnson’s time runs out on delivering proposals to the EU. We expect the Pound to be particularly sensitive to any updates over the course of the day.

At the time of writing, the Pound was down by 0.02% to $1.2440.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include U.S import and export price figures along with prelim consumer sentiment and expectation figures for October.

On the data front, we expect the Michigan consumer sentiment figures to have the greatest influence late in the day.

On the geopolitical front, it’s Friday, which has proven to be one of Trump’s favored day for tweeting. Following positive updates on Thursday, there could be further pick up in risk appetite should talks progress favorably.

The Dollar Spot Index was down by 0.02% to 98.686 at the time of writing.

For the Loonie

It’s a  relatively busy day on the economic calendar. Economic data includes September employment change figures and the September unemployment rate.

With economic data having been on the lighter side in the week, expect the Loonie to respond to the numbers.

Ahead of the stats, market sentiment towards the economic outlook and impact on crude oil prices will also provide direction.

The Loonie was down by 0.02% at C$1.3294, against the U.S Dollar, at the time of writing.

It’s All Eyes on Washington as Trade Talks Resume Later Today

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

The Aussie Dollar was in action, with October consumer confidence and August home loan figures providing direction early on.

On the geopolitical risk front, news of China being supportive of a trade agreement failed to spur demand for riskier assets. Trade tensions have been on the rise and China’s support of an agreement comes with a caveat that no further tariffs are introduced.

With talks set to resume later today, some caution was to be expected…

For the Aussie Dollar

The Westpac Consumer Sentiment Index fell by 5.5% to 92.8 in October, reversing a 1.7% rise in September.

According to the Westpac report,

  • The slide came in spite of the RBA’s latest rate cut, which will be of concern when considering the reliance on consumer spending.
  • Global events, including deteriorating U.S – China trade relations, contributed to the weakest confidence since July 2015.
  • Looking at the numbers:
    • The sub-index for family finances vs a year ago fell by 4.9%, with finances for next 12-months down by 3.7%.
    • Economic conditions next 12-months slid by 6.0%, while economic conditions next 5-years slumped by 9.1%. The next 12-months sub-index was down 15.1% year-on-year, while the next 5-years was down by 6.4%.
    • The time to buy a major household item sub-index fell by 4.2% following last month’s 2.8% decline.
    • On the labor market front, the Unemployment Expectations Index fell by 1.3%, while up by 7.3% year-on-year.
    • The Time to buy a dwelling index fell by 5.4%, whilst rising by 13.7% over the year. By contrast, the House Price Expectations Index rose by 5.9%.

The Aussie Dollar moved from $0.67150 to $0.67141 upon release of the figures that preceded the home loan numbers.

Home loans rose by 1.8% in August, following on from a 5% jump in July, according to the ABS. Economists had forecast a rise of 3.6%.

The Aussie Dollar moved from $0.67172 to $0.67165 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.10% to $0.6718.

Elsewhere

At the time of writing, The Japanese Yen was up by 0.16% to ¥107.31 against the U.S Dollar, while the Kiwi Dollar down by 0.0.06% to $0.6289.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar, with German trade data due out of the Eurozone in the day ahead.

Following factory orders and industrial production figures from earlier in the week, the data would need to impress to support the EUR.

On the geopolitical front, Brexit will also be a factor along with any chatter on trade, as trade talks resume later today.

At the time of writing, the EUR was up by 0.10% to $1.0982.

For the Pound

It’s a busy day ahead on the data front. Economic data includes August industrial and manufacturing production, GDP numbers and trade data.

We would expect the manufacturing production and GDP figures to have the greatest influence on the day.

On the geopolitical front, Brexit will continue to be a key driver, however. With EU Summit just over a week away, we can expect the Pound to be particularly responsive to any updates from the EU or Westminster.

From earlier in the day, the UK’s RICS House Price Balance for September had a muted impact on the Pound.

According to the latest survey, the RICS House Price Balance Index rose from -4% to -2% in September.

At the time of writing, the Pound was up by 0.06% to $1.2213.

Across the Pond

It’s a relatively busy day ahead on the economic calendar, with inflation and initial jobless claims figures due out of the U.S later today.

While we can expect the Dollar to respond to the numbers, market sentiment towards the U.S and global economy and geopolitical risk will remain the key drivers.

Any pickup in inflationary pressure is unlikely to shift sentiment towards monetary policy near-term. FED members have become concerned over a likely softening in inflationary pressures. Consumer prices are forecast to rise by 0.2% in September, softer than a 0.3% rise in August.

Jobless claims figures will take a backseat on the day, barring an unexpected rise in claims. The Dollar would need initial weekly claims to hold at sub-230k levels to avoid a sell-off.

The Dollar Spot Index was down by 0.07% to 99.052 at the time of writing, with the overnight FOMC meeting minutes weighing early on.

For the Loonie

It’s a quiet day on the economic calendar. Economic data is limited to August house price figures. Barring particularly dire numbers, we would expect the numbers to have a muted impact on the Loonie.

On the day, the OPEC meeting’s influence on crude oil prices and sentiment towards the global economy will provide direction.

Economic data from the Eurozone and the U.S suggest that a further cut in OPEC output and supply is required.

The Loonie would need the hope of a near-term end to the U.S – China trade war and a cut in the supply crude oil to find support.

The Loonie was down by 0.07% at C$1.3342, against the U.S Dollar, at the time of writing.

A Light Economic Calendar Puts Geopolitics in the Driving Seat

Earlier in the Day:

It was a particularly quiet day on the economic calendar through the Asian session this morning.

There were no material stats due out of Asia to provide the majors with the direction in the early part of the day.

A lack of stats left the majors in the hands of market risk sentiment and geopolitical risk.

On the geopolitical risk front, negative sentiment towards the resumption of U.S – China trade talks tested risk sentiment early on

For the Majors

The Japanese Yen was down by 0.07% to ¥107.16 against the U.S Dollar, while the Aussie Dollar was up by 0.18% to $0.6740. At the time of writing, the Kiwi Dollar up by 0.24% to $0.6313.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. With no material stats due out of the Eurozone in the day ahead.

A lack of stats will leave the EUR in the hands of Brexit chatter and market risk sentiment throughout the day.

Following softer nonfarm payroll numbers on Friday, JOLT job openings could spook the markets should quit rates slide in August.

At the time of writing, the EUR was up by 0.05% to $1.0962.

For the Pound

It’s also particularly quiet day ahead on the data front, with no material stats due out of the UK to provide the Pound with direction.

The lack of stats will leave Brexit and UK politics to provide direction on the day. Barring particularly good news on the deal front, any upside for the Pound would be limited.

At the time of writing, the Pound was down by 0.03% to $1.2215.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar, August’s JOLTs job opening figures due out of the U.S later today.

Whilst the headline number will influence, following last week’s NFP numbers, expect quit rates to have a greater impact on the day.

A fall in openings, with a steady quit rate, would reflect stable labor market conditions that would support the Greenback.

On the geopolitical front, it’s all about the trade talks with China. Expect updates from Washington and Beijing to drive the Dollar.

The Dollar Spot Index was down by 0.03% to 99.103 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out later today, leaving the Loonie in the hands of the weekly EIA numbers and sentiment towards the global economy.

The Loonie was up by 0.06% at C$1.3317, against the U.S Dollar, at the time of writing.

It’s Risk-on Early as Focus Remains on Trade and Brexit

Earlier in the Day:

It was a particularly busy day on the economic calendar through the Asian session this morning.

Japan’s household spending, Australian business confidence, and China’s Caixin Services PMI figures provided direction early on. For the Pound, the BRC Retail Sales Monitor report was also in focus.

While economic data was on the heavier side, geopolitics also influenced, ultimately providing support to riskier assets in the session.

For the Japanese Yen

Household spending rose by 2.4%, month-on-month, in August reversing a 0.9% fall from July. Economists had forecasted a 2.8% increase. Year-on-year, household spending rose by 1.0%, falling short of a forecasted 1.2% rise. Spending had risen by 0.8%, year-on-year, in July.

According to the Statistic Bureau,

  • Spending on furniture & household utensils surged by 13.2%, with spending on clothing & footwear rising by 4.7%.
  • There were also increases in spending on transportation & communication (+3.4%), food (+1.6%) and medical care (+1.0%).
  • Sales on fuel, light & water charges slid by 9.7%, however, with spending on education falling by 7.8%, pinning back total spending.
  • There was also a 1.8% fall in spending on housing.

The Japanese Yen moved from ¥107.266 to ¥107.259 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.10% to ¥107.37 against the U.S Dollar.

For the Aussie Dollar

The NAB Business Confidence Index fell from 1 to 0 in September.

According to the September survey,

  • While confidence eased further, business conditions improved, with the index rising by 1 point to +2.
  • Both the conditions and confidence indexes remained below the average of +6 points in September.
  • Profitability and trading conditions also remained below their respective averages, while the employment index rose above its average in September.
  • The profitability, trading and employment indexes rose by 1 point each in the month.
  • Retail and wholesale reported the weakest figures, with manufacturing and construction also weak.

The Aussie Dollar moved from $0.67297 to $0.67296 upon release of the figures that preceded China’s service sector PMI figures.

Out of China

The Caixin Services PMI slipped from 52.1 to 51.3 in September, which was worse than a forecasted hold at 52.1.

According to the September Markit survey,

  • The services sector reported the softest rise in activity for 7-months, in spite of a sharp pickup in new orders.
  • New order growth rose at the sharpest pace since January 2018, with new export work rising for a 3rd consecutive month.
  • On the employment front, the services sector reported the largest increase in payrolls since January 2017.
  • Backlogs were also on the rise, driven by stronger demand, supporting the uptick in the pace of hiring.
  • In spite of some positive components, optimism in the sector fell to its lowest level since May.

The Aussie Dollar moved from $0.67349 to $0.67401 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.10% to $0.6740.

Elsewhere

At the time of writing, the Kiwi Dollar up by 0.29% to $0.6307.

The Day Ahead:

For the EUR

It’s another relatively quiet day ahead on the economic calendar. Germany’s August industrial production numbers are due out in the early part of the day.

Off the back of Monday’s factor order numbers and last week’s manufacturing PMI, the EUR could be in for another dip. Forecasts are for a 0.3% fall in production…

Outside of the numbers, expect Brexit chatter on trade and any further talk of U.S tariffs on EU goods to also influence.

At the time of writing, the EUR was up by 0.03% to $1.0974.

For the Pound

It’s a relatively quiet day ahead on the data front. Economic data is limited to 2nd quarter labor productivity numbers due out in the early part of the day.

We would expect the Pound to show little reaction to the numbers, however, with Brexit remaining the key driver in the week.

On the monetary policy front, Bank of England Governor Carney is also scheduled to speak ahead of the European open.

From earlier in the day, the UK’s BRC Retail Sales Monitor fell by 1.70% in September, year-on-year, following a 0.5% fall in August.

On the  Brexit front, time is running out and the chances of a deal ahead of 19th October Summit look slim as the EU rebuffs Britain’s proposals. Next up, a general election or a resignation?

At the time of writing, the Pound was down by 0.01% to $1.2292.

Across the Pond

It’s a relatively busy day ahead on the economic calendar, with wholesale inflation figures due out of the U.S later today.

While we can expect the Dollar to respond to the numbers, market sentiment towards the U.S and global economy and geopolitical risk will remain the key drivers.

The threat of impeachment could force Trump’s hand in delivering a deal…

On the monetary policy front, FED Chair Powell is scheduled to speak later in the day. Following a string of weak economic numbers, will the fall in the unemployment rate cause the FED to hesitate or deliver more cuts?

The Dollar Spot Index was down by 0.01% to 98.962 at the time of writing.

For the Loonie

It’s a  quiet day on the economic calendar. Economic data is limited August building permit figures. Barring particularly dire numbers, we would expect the numbers to have a muted impact on the Loonie.

On the day, sentiment towards the global economy and geopolitical risk will likely have the greatest influence on the day.

The Loonie was up by 0.10% at C$1.3298, against the U.S Dollar, at the time of writing.

GBP/USD Daily Forecast – Range Persists Below 20 DMA

The Brexit Clock is Ticking

British Prime Minister Boris Johnson put forth a new Brexit plan last week that Parliament can likely get behind. However, officials in Brussels didn’t seem too excited about the proposal and highlighted several concerns.

Johnson has vowed to deliver an EU exit by October 31 but time is running out for the British PM. He will need to secure a deal by the EU summit next week or request an extension. I think its quite likely that further efforts from Johnson will tend to dominate headlines moving forward, causing a rise in volatility for Sterling pairs.

GBP/USD has been held higher, on a daily close basis, by a horizontal technical support level at 1.2287 since late September. At the same time, recovery rallies have struggled at resistance from the 20-day moving average to trigger a range.

A recovery attempt last week was hindered by the mentioned overhead resistance. The pair fell under further pressure after the US unemployment rate unexpectedly fell to 3.5%. However, losses were not sustained and the exchange rate is essentially directionless at this stage.

Technical Analysis

Support at 1.2287 is considered important as it offered major resistance in August to end a two-week recovery. Although the pair has fallen below the level on an intraday basis a few times, daily closes have held above it, indicating some strength.

GBPUSD Daily Chart

At the same time, Overhead resistance at 1.2373 carries confluence with the  20-day moving average and has held the upside.

A break from either level will tend to clarify the near-term directional bias for GBP/USD. Considering the looming Brexit deadline, we are likely to see a technical break from the range fairly soon.

The dollar has not shown any concrete signs of reversing against its major counterparts. From that standpoint GBP/USD has a slight bearish bias. But how things play out with Brexit will tend to trump dollar fluctuations.

Bottom Line

  • GBP/USD continues to trade in a range.
  • With the Brexit deadline nearing, volatility is likely to increase.
  • Range support for the pair remains at 1.2287, resistance resides at 1.2373.

German Factory Orders, Brexit and Trade to Influence the Majors

Earlier in the Day:

It was a particularly quiet day on the economic calendar through the Asian session this morning.

There were no material stats to provide direction at the start of the week, with the China markets closed for one final day.

A lack of stats left the majors in the hands of Friday’s nonfarm payroll numbers and the outlook towards trade talks, which tested risk sentiment at the start of the week.

It was risk-off in the early part of the day, with Chinese Yuan, Aussie Dollar, and Kiwi Dollar seeing early losses.

For the Majors

At the time of writing, the Aussie Dollar was down by 0.21% to $0.6757, with the Kiwi Dollar down by 0.02% to $0.6319. The Japanese Yen was up by 0.14% to ¥106.79 against the U.S Dollar, supported by jittery markets this morning.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. Germany’s August factory order numbers are due out in the early part of the day.

Off the back of some disappointing private sector PMIs, we can expect the EUR to be responsive to the figures with little else on the economic calendar to provide a distraction.

With no material stats due out of the U.S later in the day, geopolitics and FOMC member chatter will provide direction later in the session.

On the geopolitical front, there’s Brexit and trade war chatter to consider. Will the U.S President elaborate on EU tariffs?

At the time of writing, the EUR was up by 0.07% to $1.0987.

For the Pound

It’s a quiet day ahead on the data front. Economic data is limited to September house prices figures that will unlikely influence the Pound.

The lack of stats leaves Brexit chatter front and center. With the British Prime Minister running out of time, any hint of an agreeable alternative to the Irish Backstop would be a boon for the Pound.

At the time of writing, the Pound was down by 0.01% to $1.2330.

Across the Pond

It’s a particularly quiet day ahead on the economic calendar, with no material stats due out of the U.S later today.

A lack of stats will leave the Oval Office and Beijing in focus. The markets will be looking for positive chatter ahead of a resumption of negotiations.

While any positive sentiment towards progress on trade talks would be positive for the Dollar, negative sentiment towards the U.S economy would limit any upside.

The Dollar Spot Index was down by 0.04% to 98.771 at the time of writing.

For the Loonie

It’s also a quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of crude oil prices on the day.

Against the greenback, there could be some further upside, with monetary policy divergence continuing to favor the Loonie near-term.

The Loonie was down by 0.01% at C$1.3315, against the U.S Dollar, at the time of writing. A fall in crude oil prices weighed early on.

 

Nonfarm Payrolls and Wage Growth Keep the Greenback in Focus

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

Australia retail sales figures and the RBA’s Financial Stability Report provided the Aussie Dollar with direction early in the day.

For the Aussie Dollar

Retail sales rose by 0.4% in August, month-on-month, following on from a 0.1% decline in July. Economists had forecast a 0.5% rise.

According to the ABS,

  • Food retailing sales increased by 0.4% to lead the way. Sales in clothing, footwear and personal accessory retailing rose by 1.8.%, department stores by 1.1% and household goods retailing by 0.3%.
  • Other retailing also increased by 0.3%.
  • Partially offsetting the uptick was a 0.3% fall in cafes, restaurants and takeaway services.

The RBA’s Financial Stability Report had little influence following Tuesday’s rate cut. There were few surprises, with concerns over housing and the global economic outlook a main area of focus. The RBA noted that the housing market was a key source of potential systemic risk, the warning coming in spite of improved market conditions.

The Aussie Dollar moved from $0.67532 to $0.67527 upon release of the figures and financial stability report. At the time of writing, the Aussie Dollar was up by 0.18% to $0.6765.

Elsewhere

At the time of writing, the Kiwi Dollar was up by 0.0.30% to $0.6322, with the Japanese Yen was up by 0.08% to ¥106.83 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

Following a heavy data set in the week, the markets will have an opportunity to reflect on what the numbers mean from a monetary policy perspective.

Economic data out of the U.S later in the day will influence sentiment across the broader markets, however, with nonfarm payrolls due out.

Outside of the numbers, geopolitical risk will continue to impact as the Brexit clock ticks away and the markets look ahead to next week’s trade talks.

At the time of writing, the EUR was up by 0.06% to $1.0972.

For the Pound

It’s a quiet day ahead on the data front. There are no material stats due out to provide the Pound with direction.

The lack of stats leaves the Pound firmly in the hand of Brexit chatter and news from the UK Parliament.

At the time of writing, the Pound was up by 0.08% to $1.2342.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include nonfarm payrolls, wage growth figures and September’s unemployment rate.

We can expect the headline nonfarm and wage growth to have the greatest impact on the day. August trade data is also due out, though it will likely have a muted impact on the Greenback.

On the political front, impeachment talk and any updates on trade will also impact. With less than a week to go before trade talks are set to resume, any negative chatter would weigh on the Greenback.

The Dollar Spot Index was up by 0.01% to 98.869 at the time of writing.

For the Loonie

It’s a relatively busy day on the economic calendar. August trade data and September’s Ivey PMI are due out later today.

We can expect the Loonie to respond to the numbers, which will need to hold steady to support the BoC’s current stance on monetary policy.

The Loonie was up by 0.04% at C$1.3332, against the U.S Dollar, at the time of writing.

Service Sector PMIs Put the EUR, GBP and Greenback in Focus

Earlier in the Day:

It was another quiet day on the economic calendar through the Asian session this morning.

Japan service sector PMI and Australia trade data provided direction through the early part of the day.

Outside of the stats, the markets also responded to weak overnight economic data out of the U.S that refueled concerns over the state of the global economy.

For the Japanese Yen

The finalized September service sector PMI came in at 52.7, which was in line with forecasts, whilst down from a prelim 53.3. According to the finalized Markit survey,

  • While new orders grew at the slowest pace this year, firms reported continuingly strong order book volumes in September.
  • New export sales growth was the strongest since Jul-2018.
  • Employment growth was marginally higher than August’s 18-month low.
  • Business confidence rose to a 3-month high supported by expansion plans and stronger demand.

The Japanese Yen moved from ¥107.053 to ¥106.999 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.07% to ¥107.11 against the U.S Dollar.

For the Aussie Dollar

The trade surplus narrowed from a revised A$7.253bn to A$5.926bn in August, a decrease of A$1,327m from July 2019. Economists had forecasted a narrowing to A$6.00bn.

According to the ABS,

  • Goods and services credits fell by A$1,464m (3%) to A$40,982m.
    • Non-rural goods exports fell A$971m (4%), with non-monetary gold credits falling by A$601m (22%).
    • Rural goods exports rose A$51m (1%), with the net exports of goods under merchanting rising by A$3m (25%).
    • Services credits rose A$53m (1%).
  • Goods and services debits fell A$137m to A$35,056m.
    • Intermediate and other merchandise goods imports fell A$424m (4%).
    • The imports of capital goods fell by A$115m (2%) and consumption goods by A$76m (1%).
    • Non-monetary gold imports rose A$313m (40%), with services debits rising A$164m (2%).

The Aussie Dollar moved from $0.067111 to $0.67093 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.07% to $0.6712.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.03% to $0.6267.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Service sector PMI numbers are due out of Spain and Italy, along with Eurozone retail sales figures.

Finalized French, German, and Eurozone service sector and composite PMIs are also due out.

Barring deviation from prelim, we would expect the market focus to be on the Eurozone services PMI and composite and retail sales figures.

Outside of the numbers, geopolitical risk will continue to influence.

At the time of writing, the EUR was up by 0.01% to $1.0960.

For the Pound

It’s a relatively busy day ahead on the data front. September’s services PMI and composite are due out later this morning.

Service sector activity is a key contributor to the UK economy. Any further slowdown in service sector activity will add further pressure on the Pound.

It will ultimately continue to boil down to UK politics and Brexit on the day, however.

At the time of writing, the Pound was down by 0.04% to $1.2298.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include the markets’ preferred ISM non-manufacturing ISM figures, factory orders, and weekly initial jobless claims numbers.

Of less influence on the day are finalized services and composite PMI numbers.

On the political front, any impeachment talk and any updates on trade will also impact. With a week to go before trade talks are set to resume, any negative chatter would weigh on the Greenback. Market jitters over the U.S economy will make the Dollar all the more sensitive.

The Dollar Spot Index was down by 0.01% to 99.006 at the time of writing.

For the Loonie

It’s another quiet day on the economic calendar. There are no material stats due out of Canada later today, leaving the Loonie in the hands crude oil prices and sentiment towards impending trade talks.

The Loonie was up by 0.02% at C$1.3323, against the U.S Dollar, at the time of writing.

Brexit, Boris Johnson and the Pound are in Focus later Today

Earlier in the Day:

After a particularly busy start to the week, it was a quiet day on the economic calendar through the Asian session this morning.

There were no material stats to provide direction through the day, leaving the markets to respond to overnight private sector PMIs from the U.S.

Particularly weak PMIs weighed on risk sentiment through the early part of the session.

On the geopolitical front, while news of the U.S not planning to delist Chinese companies from the U.S exchanges was positive, negative sentiment lingered ahead of the resumption of U.S – China trade talks next week.

For the Majors

At the time of writing, the Japanese Yen was up by 0.06% to ¥107.68 against the U.S Dollar, with the Kiwi Dollar up by 0.10% to $0.6251.The Aussie Dollar also found early support, rising by 0.13% to $0.6713.

Market reaction to the U.S PMI numbers from Tuesday weighed on the greenback to give the majors early gains.

In the equity markets, the Nikkei was down by 0.59% and the ASX200 by 1.42%. The declines also came in response to Tuesday’s stats.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Spanish unemployment figures are due out through the early part of the session.

Barring particularly impressive numbers, there’s unlikely to be too much movement in the EUR in response to the numbers.

Outside of the numbers, expect Brexit chatter will also influence.

At the time of writing, the EUR was up by 0.05% to $1.0939.

For the Pound

It’s another relatively quiet day ahead on the data front. September’s construction PMI is due out later this morning.

Following Tuesday’s manufacturing PMI, the Pound could find much-needed support should the pace of contraction ease.

It will ultimately boil down to UK politics and Brexit, however. While economic indicators flash red, any positive chatter from the EU or the Tory Party Conference would support the Pound.

News of the British PM striking a deal with the DUP is positive as Johnson prepares to deliver his proposals to the EU. Support from the DUP is a must for any deal to get the backing of MPs.

With the EU willing to consider alternatives to the Irish backstop, the Pound could reverse its current year losses should progress be made ahead of the EU Summit…

At the time of writing, the Pound was down by 0.06% to $1.2295.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited September ADP nonfarm employment change figures.

On the political front, any updates on trade would have the greatest influence on the day.

The Dollar Spot Index was down by 0.03% to 99.103 at the time of writing, the downside coming in response to Tuesday’s PMIs.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada later today, leaving the Loonie in the hands of EIA crude oil inventories.

The Loonie was up by 0.08% at C$1.3211, against the U.S Dollar, at the time of writing.

EUR/USD Daily Forecast – Euro Extends Losses, Support in Play

Euro Manufacturing Sector Continues to Weaken

PMI data out of Europe today showed the Manufacturing industry continued to weaken in September. Eurozone PMI data declined to levels not seen since October 2012 while the German Purchasing Managers Index dropped to a decade low.

In addition to the weak Manufacturing data, Eurostat reported a decline in the Consumer Price Index to 0.9%, marking the lowest reading in nearly three years. Inflation data plays a major role in central bank decisions and the already low CPI was part of the reason why the European Central Bank eased policy last month.

Despite the overall poor data, EUR/USD appears to be catching a bid shortly after the data releases with a notable technical support area influencing the exchange rate.

Last week, EUR/USD dropped below 1.0930 which is considered an important level. It previously held the pair high twice in September and the recent break reaffirms the downtrend.

Technical Analysis

Two things stand out in EUR/USD for the session ahead. First, the pair is starting to get a bit oversold. Second, there is a confluence of support that has come into play. Between these two items, I think there is potential for a bounce in the session ahead.

EURUSD Hourly Chart

The support confluence consists of a horizontal level at 1.0881 as well as the lower bound of a trend channel. This channel has contained price action since September 19.

While I do think we could see a bit of a recovery, I think it’s important to keep in mind that the pair is in a fairly strong downtrend. Further, it is trading at multi-year lows. In this context, expecting a counter-trend recovery carries some risk.

EURUSD 4-Hour Chart

There is potential for a retest of the major 1.0930 level. Beyond that, I see further resistance at 1.0945 which currently confluences with the upper bound of the mentioned declining trend channel.

If the pair continues lower instead, the next level I have my eye on to the downside comes in at 1.0862.

Bottom Line

  • EUR/USD is attempting to bounce despite weak manufacturing and inflation data.
  • There is a strong confluence of support at 1.0881.
  • Resistance in the session ahead falls at 1.0930 followed by 1.0945.

The RBA Cut Rates ahead of a Busy Day on the Economic Calendar

Earlier in the Day:

It was another particularly busy day on the economic calendar through the Asian session this morning.

New Zealand business confidence numbers, Australia manufacturing index and Japan’s Tankan survey numbers provided direction early on.

Later in the session, building approval figures out of Australia and the RBA interest rate decision also influenced.

Geopolitical risk took a back seat early on, with the news wires on the quieter side through the early hours.

For the Kiwi Dollar

The NZIER Quarterly Survey of Business Survey (QSBO) showed that a net 35% of businesses expect a deterioration in general economic conditions in the coming months. The increase in pessimism from 34% to 35% left business confidence at its lowest level since March 2009. According to the survey,

  • The manufacturing sector remained the most pessimistic, while there were also signs of construction demand slowing.
  • Retailers were also more downbeat as a result of weaker demand, with profitability in the sector at its weakest since Sep-09.
  • Increased cost pressures and weak pricing power reportedly continued to weigh on profitability across most sectors.
  • As a result of weakening profitability, a net 10% of firms cut staff numbers, which reflected the weakest level in hiring since Sep-12.
  • Investment intentions were also negative, with investment intentions for buildings and plant & machinery both falling to their lowest levels since Sep-09.

The Kiwi Dollar moved from $0.62628 to $0.62578 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.26% to $0.6247.

For the Japanese Yen

The Tankan surveys delivered mixed results for the quarter.

The All Big Industry CAPEX Index rose by 6.6% in the 3rd quarter, falling short of a forecasted 7.0%. CAPEX had risen by 7.4% in the 2nd quarter.

The Tankan Big Manufacturing Outlook Index slipped from 7 to 2 in the 3rd quarter, which was better than a forecasted fall to 1.

For the manufacturing sector, the Tankan Large Manufacturers Index fell from 7 to 5 in the quarter, which better than a forecasted 2.

For the non-manufacturing sector, the Tankan Large Non-Manufacturers Index declined from 23 to 21 in the quarter. Forecasts were for a fall to 20.

The Japanese Yen moved from ¥108.065 to ¥108.061 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.17% to ¥108.26 against the U.S Dollar.

For the Aussie Dollar

The AIG Manufacturing Index rose from 53.1 to 54.7 in September. According to the latest survey,

  • Employment and new orders picked up in September, supported by the F&B and Machinery and Equipment manufacturing sectors.
  • The F&B sub-index rose by 0.2 points to 59.2, while the Machinery & Equipment index increased by 2.5 points to 56.7.
  • By sector, metal products (41.3) and TCF, Paper & Printing (41.8) continued to contract.
  • Looking at the sub-indexes, the new orders sub-index rose by 3.8 points to 57.1, with the employment sub-index rising by 6.2 points to 57.6.
  • Exports were in decline, however, falling by 6.1 points to 49.6, with the production sub-index falling by 3.4 points to 49.8.
  • Average wages continued to rise, with the sub-index up 3.5 points to 63.8.

The Aussie Dollar moved from $0.67502 to $0.67501 upon release of the figures that preceded the RBA interest rate decision and building approval figures.

Month-on-month, building approvals fell by 1.1% in August, following on from a 9.7% slide in July. Economists had forecast a 2.5% rise. According to the ABS,

  • A 2.4% slide in the approval of private houses weighed in August.
  • Approvals excluding houses rose by 3.1%

The Aussie Dollar moved from $0.67518 to $0.67519 upon release of the figures that preceded the RBA interest rate decision.

Later in the session, the RBA cut interest rates by 25 basis points to 0.75%, which was in line with market expectations, which left the Aussie Dollar in the hands of the RBA Rate Statement.

The rate statement reflected the RBA’s willingness to ease monetary policy, which weighed on the Aussie Dollar.

The Aussie Dollar moved from $0.67457 to $0.67357 upon release of the rate statement. At the time of writing, the Aussie Dollar was down by 0.21% to $0.6736.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. September manufacturing PMIs out of Spain and Italy and finalized manufacturing PMIs out of France, Germany and the Eurozone will influence early in the session.

Later in the session, prelim Eurozone inflation figures will also influence. Any upside would be limited for the EUR, however, with negative sentiment towards the Eurozone economy pinning back the EUR.

Outside of the numbers, expect Brexit chatter and impeachment talk from the U.S to also influence.

At the time of writing, the EUR was down 0.08% at $1.0891.

For the Pound

It’s also a relatively quiet day ahead on the data front. September’s manufacturing PMI is due out later this morning.

With the UK economy struggling, a more accelerated decline in manufacturing sector activity would weigh heavily on the Pound.

Outside of the numbers, expect chatter on Brexit and the UK Parliament to also provide direction through the day.

The Pound is going to need talk of a deal to prevent a move lower to $1.21 levels…

At the time of writing, the Pound was down by 0.01% to $1.2288.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include the market’s preferred ISM Manufacturing PMI for September. We can expect the employment and new orders sub-index to have the greatest influence alongside the headline figure

The Markit survey’s finalized manufacturing PMI is also due out but will likely have a muted impact on the day.

On the political front, any impeachment talk and chatter on trade will need consideration.

The Dollar Spot Index was up by 0.10% to 99.479 at the time of writing.

For the Loonie

It’s a relatively quiet day on the economic calendar. July GDP numbers are due out of Canada later this afternoon.

With the markets expecting the BoC to hold steady on rates, softer numbers would weigh heavily on the Loonie. For now, the Loonie continues to find support from monetary policy divergence.

On Monday, the Liberal Party’s announcement of a ramp-up in government spending had offset the negative impact of crude oil prices on the day.

The Loonie was down by 0.04% at C$1.3246, against the U.S Dollar, at the time of writing.

Economic Data, Brexit and U.S Politics Keep the Majors in Focus

Earlier in the Day:

It was a particularly busy day on the economic calendar through the Asian session this morning.

New Zealand building consents and business confidence numbers, and Japan retail sales and industrial production figures provided early direction.

Later in the session, September private sector PMI numbers out of China and Australia August private sector credit figures also influenced.

Outside of the numbers, geopolitical risk continued to be a test for the majors. Negative sentiment towards trade tested risk sentiment early on.

For the Kiwi Dollar

Building consents rose by 0.8% in August, following a 1.3% decline in July. Economists had forecast a 2.7% fall.

According to NZ Stats,

  • Consents for stand-alone houses fell by 1.5%.
  • In the year ended August 2019, the number of new dwellings consented rose by 8.8%.
  • By region, an 11% jump in consents in Auckland drove the headline number.

The Kiwi Dollar moved from $0.62880 to $0.62902 upon release of the figures that preceded Business confidence figures later in the morning.

Business Confidence deteriorated further in September. The ANZ Business Confidence Index fell from -52.30 to 53.50.

According to the latest ANZ Report,

  • Investment intentions fell by 5 points to -9, with profit expectations falling by 5 points to a net 25% of respondents expecting profitability to decline.
  • Employment intentions eked out a 1 point gain to a net 8% of firms intending to reduce employment.
  • Cost pressures fell by 2 points to +47, with inflation expectations falling from 1.70% to 1.63%. Price intentions fell by 2 points to a net 18% of firms expecting to raise prices.

The Kiwi Dollar moved from $0.62856 to $0.62812 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.40% to $0.6271.

For the Japanese Yen

Industrial production fell by 1.2% in August, according to prelim figures, following a 1.3% rise in July. Economists had forecasted a 0.5% decline.

According to finalized figures released by the Ministry of Economy, Trade, and Industry,

  • Industries that mainly contributed to the decrease, in order, were
    • Iron, steel and non-ferrous metals.
    • Production machinery.
    • Motor vehicles.
  • Industries that mainly contributed to the increase, in order, were
    • Electronic parts and devices.
    • Chemicals (excl. inorganic, organic chemicals, and medicine).
    • Inorganic and organic chemicals.
  • For September, industrial production is projected to rise by 1.9%, whilst forecasted to fall by 0.5% in October.
    • An increase in the production of production machinery, electrical machinery and information and communication electronics equipment and ‘others’ are forecasted to provide support in September.
    • A decrease in the production of transport equipment, electrical machinery and information and communication electronics equipment, and electronics parts and devices are forecasted to weigh on production in October.

Retail sales rose by 2% in August, reversing a 2% decline in July, according to the Ministry of Economy, Trade, and Industry. Economists had forecast a 0.9% rise.

The Japanese Yen moved from ¥107.944 to ¥107.956 upon release of the figures.

At the time of writing, the Japanese Yen was down by 0.02% to ¥107.94 against the U.S Dollar.

Out of China

The NBS Manufacturing PMI rose from 49.5 to 49.8 in September, coming in ahead of a forecasted 49.5, while the non-manufacturing PMI fell from 53.8 to 53.7. Economists had forecast a rise to 54.2.

For the manufacturing sector, it was the 5th consecutive monthly contraction as trade tariffs continued to bite.

The Aussie Dollar moved from $0.67573 to $0.67566 upon release of the figures that preceded the Caixin PMI numbers and stats out of Austalia.

Later in the morning, the Caixin Manufacturing PMI jumped from 50.4 to 51.4. Economists had forecast a fall to 50.2.

According to the September Markit Survey,

  • Production and total new orders expanded at a quicker pace, while new export business reduced further.
  • Firms reportedly expanded their buying activity and inventories, though at marginal rates.
  • Factory gate prices stabilized after 2 consecutive months of discounting, while input prices rose due to currency movements.

The Aussie Dollar moved from $0.67624 to $0.67698 upon release of the figures.

For the Aussie Dollar

Month-on-month, private sector credit rose by 0.2% in August, according to figures released by RBA, which worse than a forecast of 0.3%. Private sector credit had risen by 0.2% in July

The Aussie Dollar moved from $0.67575 to $0.67624 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.03% to $0.67637.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. German retail sales and employment figures are due out in the early part of the day.

Later in the session, the Eurozone’s unemployment rate is also due out later in the day.

We would expect the EUR to be particularly sensitive to the numbers.

Spanish GDP and inflation figures will likely have limited influence on the EUR.

Outside of the numbers, expect Brexit chatter, trade, and impeachment talk from the U.S to also influence.

At the time of writing, the EUR was down by 0.05% to $1.0934.

For the Pound

It’s also a relatively busy day ahead on the data front. 2nd quarter GDP and business investment figures are due out later this morning.

We can expect the Pound to be sensitive to any contraction in the UK economy, following better than expected 2nd estimate numbers.

Outside of the numbers, Brexit will continue to be the key driver. France and Finland had imposed a 30th September deadline, which will leave the Pound sensitive to any updates.

There’s also the Tory Party Conference to consider throughout the day.

At the time of writing, the Pound was down by 0.01% to $1.2291.

Across the Pond

It’s a quiet day ahead on the economic calendar. Key stats are limited to September’s Chicago PMI. With a lack of stats, we can expect the Dollar to be responsive to the figures.

Outside of the numbers, expect impeachment and trade chatter to be the key drivers on the day.

The Dollar Spot Index was up by 0.04% to 99.151 at the time of writing.

For the Loonie

It’s a quiet start to the week on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of market risk sentiment, with China’s private sector PMIs likely to be the key influence on oil prices and the Loonie.

The Loonie was up by 0.06% at C$1.3239, against the U.S Dollar, at the time of writing.

Economic Data and Geopolitics Keep the USD and GBP in Focus

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

Key stats included September inflation figures out of Japan.

Outside of the numbers, geopolitical risk continued to be a test for the majors.

While trade chatter was positive on Wednesday, news hit the wires on Thursday that the U.S government was unlikely to extend the waiver given to U.S firms to continue to supply Huawei.

Throughout the extended trade war, Huawei has been an integral part of talks. With China ramping up U.S agriculture imports, the latest news could limit any progress in talks next month.

From the U.S, impeachment talk was also negative for the Asian markets early on.

For the Japanese Yen

Tokyo’s core annual rate of inflation eased from 0.7% to 0.5% in September, which was worse than a forecast of 0.6%. According to consumer price figures released by the Ministry of Internal Affairs and Communication,

  • Prices for transportation and communication slid by 1.1%, with prices for clothing and footwear falling by 0.4%.
  • A 3.2% rise in the prices for furniture and household goods provided support.
  • Month-on-month, Tokyo consumer prices ex fresh food and energy fell by 0.3% in September. In August prices had risen by 0.6%.

The Japanese Yen moved from ¥107.80 to ¥107.797 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.08% to ¥107.74 against the U.S Dollar

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.11% to $0.6291, with the Aussie Dollar down by 0.03% to $0.6747.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. August consumer spending figures are due out of France ahead of the European open.

We would expect the EUR to be responsive to the numbers. Following some dire private sector PMI numbers at the start of the week, consumer spending is a must for the Eurozone economy.

Outside of the numbers, expect political chatter from both sides of the Pond to influence.

At the time of writing, the EUR was flat at $1.0921.

For the Pound

It’s another quiet day ahead on the data front, with no material stats due out of the UK to provide the Pound with direction.

Brexit and British politics continue to be the key drivers. Can Boris Johnson deliver some much needed good news or will it be more doom and gloom?

We can expect the Pound to continue to feel the pressure as the Brexit clock ticks on.

At the time of writing, the Pound was down by 0.02% to $1.2326.

Across the Pond

It’s a particularly busy day ahead on the economic calendar. Key stats include August durable goods orders, the FED’s preferred Core PCE Price Index figures, and personal spending.

Later in the session, prelim September Michigan Consumer Sentiment and Expectation figures are due out.

Barring a material shift in consumer sentiment and expectations, we would expect the markets to brush aside the University of Michigan numbers.

Outside of the numbers, however, trade war chatter and impeachment talk will also influence through the day.

The Dollar Spot Index was up by 0.04% to 99.173 at the time of writing.

For the Loonie

It’s yet another quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment and any chatter on Iran in the wake of the attacks on the Saudi oil fields. Trump will be looking to change the narrative as impeachment talk continues.

The Loonie was down by 0.03% at C$1.3272, against the U.S Dollar, at the time of writing.

Economic Data and Geopolitics Put the Dollar in the Spotlight

Earlier in the Day:

It was a particularly quiet day on the economic calendar through the Asian session this morning.

There were no material stats to provide the majors with the direction in the early part of the day.

A lack of stats left the markets to respond to yet another change in trade war rhetoric from both the U.S and China on Wednesday.

U.S President Trump talked up the possibility of a U.S – China trade agreement, which was likely in a bid to deflect focus on the impeachment story. News also hit the wires on Wednesday of China looking to increase pork imports from the U.S.

It remains to be seen, however, whether China’s latest decision comes in a bid to make progress or fill a pork void.

For the Majors

At the time of writing, the Kiwi Dollar was up by 0.06% to $0.6276. At the time of writing, the Japanese Yen was up by 0.12% to ¥107.64 against the U.S Dollar, while the Aussie Dollar up by 0.10% to $0.6757.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Germany’s October GfK Consumer Climate figures are due out ahead of the European open.

With the Eurozone and German economy dependent upon consumer spending, a slide in consumer sentiment would likely weigh on the EUR.

In the later part of the European session, the ECB Economic Bulletin is also due out. We would expect the Bulletin to have a muted impact on the EUR. There’s been plenty of doom and gloom and the ECB just delivered, so there’s unlikely to be too many surprises.

Outside of the numbers, geopolitics will also influence throughout the day.

At the time of writing, the EUR was up by 0.10% to $1.0954.

For the Pound

It’s another quiet day ahead on the data front, with no material stats due out of the UK to provide the Pound with direction.

Brexit and British politics continue to be the key drivers, with Boris Johnson left with just 5-days remaining to deliver an Irish backstop alternative.

At the time of writing, the Pound was up by 0.07% to $1.2362.

Across the Pond

It’s a busy day ahead on the economic calendar. Key stats include 3rd estimate GDP figures for the 2nd quarter, together with August trade data and pending home sales figures. The weekly jobless claims and August retail sales ex-autos are also due out.

Barring deviation from 2nd estimate GDP numbers or a jump in initial jobless claims, the market focus will likely be on the pending home sales, trade, and retail sales numbers.

While optimism over a resolution to the U.S – China trade war lingers, consumer confidence remains key. The housing sector has found strong support from low mortgage rates and a strong labor market. Any unexpected slide in pending home sales could pin back the Dollar.

Any chatter on trade or the Trump impeachment will likely be the key driver through the day, however.

The Dollar Spot Index was down by 0.09% to 98.95 at the time of writing.

For the Loonie

It’s another quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment.

The Loonie was up by 0.08% at C$1.3257, against the U.S Dollar, at the time of writing.

Geopolitics to Drive the Majors Through the Day

Earlier in the Day:

It was a relatively busy day on the economic calendar through the Asian session this morning.

Key stats included New Zealand’s August trade data that preceded the RBNZ’s September monetary policy decision.

Outside of the stats, the markets responded to updates from the UN General Assembly, which weighed on sentiment towards trade and on tech stocks. U.S President Trump’s negative comments on trade and social media added to the negative risk sentiment this morning.

U.S political risk joined the laundry list of risks the markets need to consider late on Tuesday, which drove demand for U.S Treasuries. The negative sentiment spilled into the early hours as the Democrats call for impeachment talks.

For the Kiwi Dollar

The trade deficit widened from NZ$700m to NZ$1,565m in August, month-on-month. Economists had forecasted a widening to NZ$1,464m.

According to NZ Stats,

  • The value of total goods exports increased by NZ$151m (3.8%) from August 2018 to NZ$4.1bn.
    • Crude oil exports jumped by NZ$58m from August 2018, supporting the rise in exports.
    • There was also an increase in exports of fruit (NZ$57m).
    • Partially offsetting the pickup in exports were falls in LNG (down NZ$73m) and intreated logs (down NZ$51m).
  • The value of total goods imports in August 2019 rose by NZ$149m (+2.7%) from August 2018 to NZ$5.7bn.
    • An NZ$73m increase in the imports of crude oil, NZ$68m increase in aircraft parts and NZ$36m increase in fertilizers contributed.
    • Passenger motor car imports fell by NZ$39m (8.2%), however.

The Kiwi Dollar moved from $0.63235 to $0.63238 upon release of the numbers that preceded the RBNZ interest rate decision and rate statement.

RBNZ Monetary policy

The RBNZ held interest rates steady at 1% following last month’s larger than expected 50 basis point rate cut.

While the hold was in line with market expectations, the RBNZ Rate Statement provided direction. Salient points from the Rate Statement included:

  • Global trade and other geopolitical tensions remain elevated and continue to subdue the global growth outlook.
  • Business confidence remains low, reflecting policy uncertainty and low profitability in some sectors that are affecting business investment.
  • Fiscal policy is expected to lift domestic demand over the coming year, though government spending could be delayed.
  • Some members noted that ongoing low inflation could cause inflation expectations to fall. Others noted that this risk was balanced by the potential for rising labor and import costs.
  • It was noted that developments since August had not significantly changed the outlook for monetary policy.
  • If necessary, there remains scope for more fiscal and monetary policy stimulus.

The Kiwi Dollar moved from $0.63044 to $0.63455 upon the release of the rate statement. At the time of writing, the Kiwi Dollar was up by 0.35% to $0.6347.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.25% to ¥107.34 against the U.S Dollar, while the Aussie Dollar flat at $0.6801.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no stats due out of the Eurozone to provide the EUR with direction.

A lack of stats will leave the market focus on Brexit, U.S – China trade war chatter and updates from the UN General Assembly.

With Iranian President Rouhani scheduled to speak, it could get choppy later in the day.

At the time of writing, the EUR was down by 0.15% to $1.1003.

For the Pound

It’s also a quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

Brexit and British politics continue to be the key driver.

At the time of writing, the Pound was down by 0.12% to $1.2472.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Key stats are limited to August new home sales figures.

The numbers are unlikely to have a material impact on the Dollar, with geopolitical risk front and center on the day.

The Dollar Spot Index was up by 0.16% to 98.491 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar once more. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment and the weekly EIA crude oil inventory numbers.

The Loonie was down by 0.07% at C$1.3252, against the U.S Dollar, at the time of writing.

UK Politics and Stats Put the GBP, EUR and USD in the Spotlight

Earlier in the Day:

It was a busier day on the economic calendar through the Asian session this morning.

Key stats included September prelim private sector PMI numbers out of Japan.

For the Japanese Yen

The manufacturing PMI slipped from 49.3 to 48.9 in September, which was worse than a forecast of 49.5. It was also negative for the services sector, with the PMI slipping from 53.3 to 52.8 in September. According to the September PMI survey,

  • New orders picked up across the services sector, with the manufacturing sector reporting a weaker decline.
  • The manufacturing sector also reported a weaker decline in new export orders, with service sector firms reporting stronger growth.
  • There was a decline in service sector employment, however, whilst the manufacturing sector reported weaker growth.

The Japanese Yen moved from ¥107.613 to ¥107.653 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.10% to ¥107.66 against the U.S Dollar.

Elsewhere

The Kiwi Dollar was down by 0.05% to $0.6291, while the Aussie dollar up by 0.01% to $0.6774. With the RBNZ monetary policy decision tomorrow, the Kiwi could struggle.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Economic data includes Germany’s Ifo Business Climate Index figures.

The EUR reacted to the dire private sector PMI numbers on Monday and there could be more downside should the figures disappoint.

On the geopolitical front, there’s Brexit and U.S – China trade war chatter to also consider throughout the day.

At the time of writing, the EUR was down by 0.01% to $1.0992.

For the Pound

It’s a quiet day ahead on the data front. Economic data is limited to September’s CBI Industrial Trends Orders.

While the UK economy managed to avoid a contraction and the BoE stands pat until there is Brexit clarity, the numbers will influence.

Any moves would likely be short-lived, however, with Brexit remaining the key driver.

Johnson reportedly has 6-days remaining to submit plausible alternatives to the Irish backstop, which will be a test for the Pound as the week progresses.

There is also the Supreme Court ruling on whether it was lawful to suspend Parliament. The ruling is expected later today. Another loss for Johnson should provide support to the Pound.

At the time of writing, the Pound was up by 0.05% to $1.2435.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include July house price figures and September’s CB Consumer Confidence figures. The CB Consumer Confidence figure will have the greatest influence. Forecasts are Dollar neutral.

Outside of the numbers, any further chatter on trade will influence as will any FOMC member chatter on monetary policy.

The Dollar Spot Index was up by 0.06% to 98.654 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

While we can expect plenty of influence from the numbers, negative sentiment towards trade weighed in the early part of the day. The markets will also be looking for updates on Saudis progress in getting production back online following the attacks on its oil field.

The Loonie was up by 0.03% at C$1.3259, against the U.S Dollar, at the time of writing.

Private Sector PMIs, Brexit and Trade in Focus

Earlier in the Day:

It was a quiet day on the economic calendar through the Asian session this morning.

There were no material stats to influence the majors in the early part of the day, leaving the markets to respond to news wires on Friday and over the weekend.

Late news on Friday tested risk appetite at the start of the week. China canceled a visit to U.S farms in response to the U.S President stating that he had no urge to end the trade war in 2020.

For the Majors

At the time of writing, the Japanese Yen was down by 0.12% to ¥107.68 against the U.S Dollar. The Kiwi Dollar was up by 0.27% to $0.6275, with the Aussie Dollar up by 0.16% to $0.6777, the pair finding some support after last week’s sell-off.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Economic data includes September private sector PMI numbers out of France, Germany, and the Eurozone.

After a relatively quiet week on the data front last week, we can expect the EUR to be sensitive to today’s numbers.

Germany’s manufacturing and Eurozone composite will likely be the key drivers. Service sector activity will need to avoid a slowdown, however.

On the geopolitical front, there’s Brexit and U.S – China trade war chatter to also consider throughout the day.

At the time of writing, the EUR was up by 0.05% to $1.1023.

For the Pound

It’s a quiet day ahead on the data front. Economic data is limited to September’s CBI Industrial Trends Orders.

While the UK economy managed to avoid a contraction and the BoE stands pat until there is Brexit clarity, the numbers will influence.

Any moves would likely be short-lived, however, with Brexit remaining the key driver.

Johnson reportedly has 7-days to submit plausible alternatives to the Irish backstop, which will be a test for the Pound as the week progresses.

There is also the Supreme Court ruling on whether it was lawful to suspend Parliament. Another loss for Johnson should provide support to the Pound.

At the time of writing, the Pound was up by 0.06% to $1.2485.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include prelim September private sector PMIs. Barring a particularly dire manufacturing PMI, the market focus will be on the services PMI. Forecasts are Dollar positive.

Outside of the numbers, any further chatter on trade will influence as will any FOMC member chatter on monetary policy.

The Dollar Spot Index was down by 0.07% to 98.448 at the time of writing. Negative sentiment towards the U.S – China trade war and likely impact on the U.S economy weighed early.

For the Loonie

It’s a relatively quiet day ahead on the economic calendar. July wholesale sales figures are due out of Canada later this afternoon.

While we can expect plenty of influence from the numbers, negative sentiment towards trade weighed in the early part of the day.

The Loonie was down by 0.10% at C$1.3276, against the U.S Dollar, at the time of writing.