GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD continues to post strong gains. In Wednesday’s North American session. Currently, the pair is trading at 1.2830, up 0.55% on the day.

Cable Surges on Brexit Optimism

The British pound surged on Tuesday, climbing an impressive 1.2%. The pound has enjoyed an excellent October, gaining 4.0%. The catalyst for this run has been the Brexit withdrawal date of October 31 and whether a deal can be made in time. The pound has soared as the markets are clearly of the opinion that an agreement can be reached and a nightmarish no-deal scenario avoided.

Technical Analysis

GBP/USD easily broke through 1.2653 on Tuesday and proceeded to test resistance at 1.2750. The trend for the pound to dollar ratio is up, and if the pair continues to move higher, it could soon set its sights on resistance at 1.2870. On the downside, there is support at 1.2585.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is trading sideways in Wednesday’s North American session. Currently, the pair is trading at 1.3214, up 0.07%.

Canadian CPI Beats Forecast

Canadian CPI moved closer to the Bank of Canada target of 2.0%. On an annualized basis, CPI showed a 1.9% gain, above the forecast of 1.7%. Trimmed CPI, which excludes the most volatile items which are covered in CPI, remained steady at 2.1%, on an annualized basis.

Technical Analysis

1.3240 remains an immediate resistance line and has been under pressure during the week. On the downside, the pair has tested support at 1.3200, but has not been able to push sustain downward movement below this level. I do not expect any significant movement for the remainder of the Wednesday session.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN has recorded slight gains on Wednesday. In the North American session, the pair is trading at 19.26, up 0.11% on the day.

Technical Analysis

USD/MXN broke through support at 19.30 early in the week and is putting pressure on 19.20, which is a major support level. This line, which has remained intact since early August, could be tested during the week. On the upside, there is resistance at 19.45.

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.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

After an impressive late-week rally, GBP/USD has settled down early this week and is range-bound. In the North American session on Tuesday, the pair is trading at 1.2646, up 0.29% on the day.

Brexit Negotiations Continue

Negotiations continue at a feverish pace, as London and Brussels and continue to try and hammer out a withdrawal agreement, with only two weeks to go before the U.K. is scheduled to depart the EU. The main sticking point continues to be the Irish border, with the EU insisting on a customs border between Ireland and Northern Ireland, which would be a problematic arrangement for the U.K. Can the sides come up with a creative solution? The pound soared last week on news that the sides were close to an agreement, and traders can expect further volatility this week, as the sides rush to reach an agreement before the October 31 deadline.

Technical Analysis

GBP/USD has been range-bound since Friday. The pair tested resistance at 1.2653 earlier on Tuesday. Above, there is resistance at 1.2750. On the downside, there is support at 1.2585.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD recorded sharp losses to end the week, but has leveled off this week. In Tuesday’s North American session, the pair is trading at 1.3234, up 0.06%.

Investors Brace for Soft Cdn. CPI

Canadian consumer inflation contracted in August, marking the second decline in three months. The September data will be published on Wednesday. The markets are expecting another decline, with an estimate of -0.3%. Traders can expect pressure on the Canadian dollar is inflation declines for a second straight month.

Technical Analysis

USD/CAD remains range-bound this week. The pair is putting strong pressure on resistance at 1.3240 and could test this line later on Tuesday. On the downside, there is immediate support at the round number of 1.3200. The pair tested this line on Friday but has since retraced upwards.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN is flat in Tuesday trade. In the North American session, the pair is trading at 19.26, down 0.03% on the day.

Technical Analysis

After gains of above 1.0% last week, the Mexican peso continued its downward movement and tested support at 19.30. This level had remained intact since early August. The pair is within striking distance of support at 19.20 and with the trend pointing down, this level could be tested during the week. Above, there is resistance at 19.45.

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.

The Week Ahead – Brexit, Earnings, Stats and the IMF and EU Summit in Focus

On the Macro

For the Dollar:

It’s a busier week ahead on the economic calendar.

NY Empire State Manufacturing figures for October get the week going on Tuesday. The focus will then shift to September retail sales figures due out on Wednesday.

With a heavy reliance on consumer spending, the numbers will need to be in line with forecasts to provide Dollar support.

On a busy Thursday, September building permit and housing start figures are due out along with October’s Philly FED Manufacturing numbers.

September industrial production and the weekly jobless claims figures are also due out.

With no material stats due out on Friday, Wednesday’s retail sales and Thursday’s Philly FED numbers will have the greatest impact.

Outside of the stats, trade war chatter will continue to be a factor, as will any further talk of impeachment.

The Dollar Spot Index ended the week down by 0.55% to $98.301.

For the EUR:

It’s also a relatively quiet week ahead on the economic data front.

Industrial production figures on Monday and German and Eurozone economic sentiment figures on Tuesday will influence early in the week.

The Eurozone’s September inflation and industrial production figures due out on Wednesday will also provide direction.

We would expect finalized inflation figures out of France and Italy to have a muted impact on the EUR, however.

With no material stats due out in the latter part of the week, geopolitical risk will remain in focus.

Any talk of U.S tariffs on EU goods and chatter on Brexit ahead of the 19th October EU Summit will also need considering.

The EUR/USD ended the week up by 0.58% to $1.1042.

For the Pound:

It’s another busy week ahead on the economic calendar.

Key stats include employment figures due out on Tuesday, inflation figures on Wednesday and retail sales numbers on Thursday.

On the data front, claimant counts, inflation and retail sales figures will be the key drivers in the week.

On the Brexit front, there would be more upside for the Pound should Johnson finalize a deal ahead of next weekend’s EU Summit.

The GBP/USD ended the week up by 2.73% to $1.2668.

For the Loonie:

It’s a relatively busy week ahead on the data front.

Key stats include September inflation figures due out on Wednesday and August manufacturing sales numbers due out on Thursday.

On the data front, we would expect the inflation figures to be the key driver in the week.

From elsewhere, trade data, industrial production and 3rd quarter GDP numbers out of China will also influence.

The Loonie ended the week up by 0.83% to C$1.3203 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s another relatively quiet week ahead.

Key stats are limited to September’s employment numbers due out on Thursday.

On the monetary policy front, the RBA minutes are due out on Tuesday and could pressure the Aussie Dollar should there be suggestions of more rate cuts to come.

From elsewhere, economic data out of China on Monday and Friday will also influence.

The Aussie Dollar ended the week up by 0.34% to $0.6794.

For the Japanese Yen:

It’s a relatively quiet week ahead on the economic calendar.

Key stats are finalized industrial production figures due out on Tuesday and inflation and trade data on Friday.

We would expect the stats to have a relatively muted impact on the Yen, however.

Geopolitics and economic data out of the U.S and China will likely have the greatest impact in the week.

The Japanese Yen ended the week down by 1.26% to ¥108.29 against the U.S Dollar.

For the Kiwi Dollar:

Stats are on the quieter side in the week ahead.

Economic data is limited to 3rd quarter inflation figures that are due out on Wednesday. We can expect the Kiwi to be particularly sensitive to the numbers.

From elsewhere, stats from China will also influence in the week.

The Kiwi Dollar ended the week up by 0.27% to $0.6337.

Out of China:

It’s a busy week on the economic data front. Economic data includes trade data due out on Monday and inflation figures on Tuesday.

The focus will then shift to a busy Friday. Stats on Friday include fixed asset investment, industrial production and 3rd quarter GDP numbers.

We expect trade data, industrial production, and the GDP numbers to have the greatest impact on market risk sentiment.

The impact of any weak numbers could be buffered, however, by any further positive chatter on trade.

The Yuan ended the week up by 0.83% to CNY7.0892 against the Greenback.

Geo-Politics

Impeachment: With the U.S and China making progress on trade, impeachment chatter could return in the week ahead.

Trade Wars: 15th October U.S tariffs on Chinese goods have been postponed as progress was made last week. For real progress to be made, however, the U.S would need to remove existing tariffs that continue to hurt the Chinese economy. Expect more chatter in the week, which will influence risk sentiment.

UK Politics: Brexit talks continue, with a deal now needed to support further the Pound ahead of the EU Summit. Any suggestions that the latest proposal is inadequate and expect the Pound to slide.

The Rest

Earnings:  It’s a big week ahead, with U.S banks Citi, Goldman, JPMorgan, and Wells Fargo announcing.

EU Summit: It is make or break for Boris Johnson and the Brexiteers. Will there finally be an agreement for the British PM to take back to parliament?

IMF Annual Meeting: Chatter on the global economy and what can be done to drive growth will influence. Will there be any agreements to ramp up fiscal spending to offset the effects of the ongoing U.S – China trade war?

The Weekly Wrap – Progress on Brexit and Trade Delivered in the Week

The Stats

It was a quieter week on the economic calendar in the week ending 11th October.

A total of 44 stats were monitored throughout the week, following 74 stats from the week prior.

Of the 44 stats, 17 came in ahead forecasts, with 22 economic indicators coming up short of forecast. 5 stats were in line with forecasts in the week.

Looking at the numbers, 19 of the stats reflected an upward trend from previous figures. Of the remaining 25, 20 stats reflected a deterioration from previous.

While the economic data was skewed to the negative, the Dollar struggled in the week, as demand for the dollar eased off the back of positive updates from trade talks and Brexit.

The U.S Dollar Index (“DXY”) fell by 0.55% to end the week at $98.301.

Out of the U.S

It was a relatively quiet week on the economic data front. Wholesale inflation figures on Tuesday and September inflation figures on Thursday provided direction early in the week.

wholesale and consumer prices were on the softer side in September, pinning back the greenback.

On Friday, positive Michigan’s consumer expectations and sentiment figures failed to support the Greenback.

Off less influence in the week, were JOLTs job openings, initial jobless claims and import and export price index figures.

Outside of the stats, the FOMC meeting minutes revealed some debate on when to end the current rate path. Rising concerns over the economic outlook suggested that more cuts could be on the way.

The reality was, however, that just 7 of 17 FOMC members foresaw a further rate cut before the year-end.

Downside for the Dollar ultimately came from an easing in geopolitical risk, with most of the damage coming at the end of the week.

In the equity markets, a Friday rebound pulled the majors into the green for the week. The Dow and S&P500 ended the week up by 0.91% and 0.62% respectively, with the NASDAQ up 0.93%.

Out of the UK

It was a busy week on the economic calendar.

Key stats included GDP, industrial and manufacturing production and trade data on Thursday.

While production was on the slide, quarter-on-quarter GDP numbers continued to show the UK economy dodging a recession. The numbers were ultimately Pound positive.

Of less influence in the week were housing sector figures, labor productivity, and retail sales numbers.

While the stats were supportive of the Pound, the upside ultimately came from Brexit news.

Progress towards a possible trade deal, ahead of next week’s EU Summit, drove demand for the Pound.

The Pound ended the week up by 2.73% to $1.2668.

For the FTSE100, a stronger Pound failed to pressure the 100, with the index rising by 1.28%.

Out of the Eurozone

It was particularly quiet week on the economic data front.

Germany’s factory orders and trade data provided little support in the week, with factory orders falling again and the trade deficit narrowing.

On the positive, however, was an unexpected rise in industrial production.

At the end of the week, finalized September inflation figures out of Germany and Spain had a muted impact on the EUR.

On the monetary policy front, the ECB monetary policy meeting minutes also left the EUR unscathed.

The upside in the week ultimately came from positive updates on Brexit and progress on the U.S – China trade talks.

For the week, the EUR rose by 0.58% to $1.1042.

For the European major indexes, the DAX30 rallied by 4.15%, with the EuroStoxx600 and CAC40 up by 3.23% and 3.00% respectively.

Elsewhere

It was another positive week for the Aussie and Kiwi Dollars.

The Aussie Dollar rose by 0.34% to $0.6794, while the Kiwi Dollar gained 0.27% to $0.6337.

For the Aussie Dollar

It was a quiet week for the Aussie Dollar.

Economic data was limited to September’s business confidence and October consumer sentiment figures.

Both business and consumer confidence figures disappointed in the week, pinning back the Aussie Dollar.

Of less influence were home loan figures that continued to reflect improved housing sector conditions.

In spite of the negative bias on the stats, a Friday rally in the Aussie Dollar delivered the gains for the week. Positive updates on trade talks delivered the upside on the day.

For the Kiwi Dollar

The stats were, once more, skewed to the negative in the week.

September’s Business PMI held steady at 48.4, coming up short of a forecast of 49.0. Electronic card retail sales also came up short of forecasts, whilst up by 0.4% in September.

While the stats were skewed to the negative on Friday, a 0.27% gain on the day gave the Kiwi Dollar the upside for the week.

For the Loonie

Through the 1st half of the week, housing sector figures impressed, proving some support.

Employment figures on Friday were the key driver, however, with the unemployment rate falling from 5.7% to 5.5%. A 53k rise in employment, following an 81.1k increase in August, delivered on the day.

Positive updates from trade talks also delivered provided support late in the week, with WTI and Brent gaining 3.58% and 3.54% respectively.

The Loonie ended the week up by 0.83% to C$1.3203 against the Greenback.

For the Japanese Yen

It was a relatively quiet week on the data front. Stats were limited to August household spending figures that came in worse than forecasts.

While the stats were Yen negative, the downside from the Yen came from an easing in geopolitical risk.

Safe-haven demand waned as progress on Brexit negotiations and trade talks spurred demand for riskier assets.

For the week, the Japanese Yen fell by 1.26% to ¥108.29.

Out of China

It was a quiet week on the economic data front.

September’s service sector PMI, which reported slower sector growth, tested risk sentiment on Monday.

A lack of stats through the remainder of the week left updates from the U.S – China trade talks to influence risk sentiment.

The Yuan rose by 0.83% to CNY7.0892 against the Greenback.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD continues its impressive late-week rally. In Friday’s North American session, the pair is trading at 1.2564, up 1.08% on the day.

Cable Soars to 13-Week High

The pound has climbed to its highest level since early July, after the leaders of the U.K. and Ireland met for Brexit talks and said that they “agreed that they could see a pathway to a possible deal.” This has renewed optimism that a no-deal scenario, which would be detrimental to the British economy, can be avoided. Further signals that a withdrawal deal is at hand could continue to boost the pound.

Technical Analysis

GBP/USD punched above several resistance lines on Thursday, and the upward movement has continued on Friday. The pair has moved some distance away from 1.2420, which had held in resistance since late September, prior to Thursday. The main trend remains up, with the next resistance line at 1.2585. This line is under pressure and could be tested in the Friday session.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is trading sideways on Friday. In the European session, the pair is trading at 1.3272, down 0.12%. Traders should keep a close eye on Canadian employment data, which will be released in the North American session. The economy is projected to create 11.2 thousand jobs, a far cry from the spectacular gain of 81.1 thousand in the previous release.

Technical Analysis

USD/CAD continues to test support at 1.3280. If the pair can continue the downward momentum, it could put pressure on 1.3240, which is the next support level.

USD/CAD 4-Hour Chart

USD/MXN

Peso Climbs to 9-Week High

USD/MXN continues to lose ground late in the week. On Friday, the pair is trading at 19.36, down 0.48% on the day. This follows a decline of 0.74% on Thursday.

Technical Analysis

USD/MXN tested support at 19.46 on Thursday and has continued the downward movement on Friday. The pair is putting pressure on support at 19.30, which has remained intact since early August. On the upside, there is resistance at 19.70.

USD/MXN 4-Hour Chart

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.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD has posted sharp gains in Thursday’s North American session. Currently, the pair is trading at 1.2338, up 1.04% on the day.

British GDP, Mfg. Production Slip

It was a rough day for British indicators, as GDP and manufacturing production both missed their estimates. The monthly GDP report declined by 0.1%, and manufacturing production declined by 0.7%, its second decline in three months. The weak numbers come just a few weeks before the U.K. is scheduled to leave the EU, with investors increasingly nervous that no deal will be reached between London and Brussels. Still, the pound has managed to post gains in the North American session, after disappointing U.S. inflation data.

Technical Analysis

GBP/USD has posted sharp gains in the North American session, blasting past resistance at 1.2255 and 1.2320. The pair has tested a third resistance level at 1.2366. Above, there is resistance at 1.2420, which has held since September 25. We’ll have to wait to see if the pair retraces and gives up some of these gains, or will the upward movement continue.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is showing its strongest movement in a week and has posted considerable losses on Thursday. In the North American session, the pair is trading at 1.3274, down 0.46% on the day.

The Canadian dollar took advantage of soft U.S. inflation, which lost ground in September. The headline release dropped to a flat 0.0%, while Core CPI dipped to 0.1%. Both readings missed their estimates.

Technical Analysis

USD/CAD is showing sustained downward movement on Thursday and has broken below support lines at 1.3320 and 1.3280. If the pair can close the day below this last line, it could continue to move lower. We find the next support line at 1.3240, which has held since October 2.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN has sustained losses Thursday’s North American session. Currently, the pair is trading at 19.46, down 0.69% on the day. The catalyst for the dollar’s weakness was weak inflation data, as CPI and Core CPI weakened in September, with readings of 0.0% and 0.1%, respectively. Both indicators missed their estimates.

Technical Analysis

The pair has taken advantage of dollar weakness in the North American session.  The support level of 19.46, which has held since September 25, is under strong pressure. If USD/MXN can consolidate below this line, it could make a move towards support at 19.30, which has remained intact since early August. Above, the resistance line at 19.70 has some breathing room as USD/MXN trades at lower levels.

USD/MXN 4-Hour Chart

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.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD is under pressure, as the pair has lost close to 1.0% so far this week. In Tuesday’s North American session, the pair is trading at 1.2221, down 0.54% on the day. U.S. inflation levels have been weak, and the Producer Price Index reports for September were dismal. Both the headline and core releases posted declines of 0.3%, missing expectations.

Technical Analysis

GBP/USD pushed below support at 1.2320 on Monday. The downward movement has continued on Tuesday, with the pair testing support at 1.2255. The main trend is down, with the next line of support at 1.2180.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD continues to show little movement this week. In the North American session, the pair is trading at 1.3313, up 0.06% on the day.

Loonie Yawns on Mixed Construction Numbers

Canada released mixed construction numbers on Tuesday. Housing starts fell to 221 thousand in September, down from 227 thousand a month earlier. There was more positive news from building permits, which jumped 6.1% in August, crushing the estimate of 2.3%. The Canadian dollar showed little reaction to the mixed releases.

Technical Analysis

USD/CAD remains range-bound this week. The pair tested resistance at 1.3320 earlier in the day. Above, we find resistance at 1.3360, which was last tested in early September. On the downside, there is support at 1.3280 – this line was relevant in the second half of September.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN is trading sideways in Tuesday trade. In the North American session, the pair is trading at 19.55, down 0.07% on the day.

Technical Analysis

After a strong downward push on Friday from USD/MXN, the downward movement has stalled this week. There is immediate resistance at the 19.70 line. On the upside, there is resistance at 19.90, which is protecting the symbolic 20.00 level. If the peso can continue to strengthen, it could put pressure on support at 19.45. This line was relevant in mid-September, when the peso tested this line but was unable to consolidate below it.

USD/MXN 4-Hour Chart

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, USDGBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD is trading sideways on Monday. In the North American session, the pair is trading at 1.2322, down 0.10% on the day.  With no key events out of the U.S. on Monday, I expect the pair to remain steady in the North American session. British data started off the week on a sour note. Halifax HPI declined 0.4%, its third decline in four months. The BRC Retail Sales Monitor posted a sharp drop of 1.7%, marking a second straight decline. 

Technical Analysis

GBP/USD has hovered close to the 1.2320 line for the past week. 1.2340 is an immediate resistance line, which was tested last week. On the downside, there is support at 1.2255.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is showing little movement on Monday. In the North American session, the pair is trading at 1.3300, down 0.10% on the day.

U.S. employment numbers were soft, as nonfarm payrolls and wage growth missed their September estimates. Still, investors did not punish the Canadian dollar, which often loses ground when the U.S. posts soft numbers. We could see stronger movement from the Canadian dollar on Tuesday, when Canada releases housing starts and building approvals.

Technical Analysis

USD/CAD tested support at 1.3320 on Thursday and is attempting to consolidate below this level. Below, there is support at 1.3280 – this line was relevant in the second half of September. On the upside, we find resistance at 1.3360, which was last tested in early September.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN suffered its worst week since early September, as the pair fell close to 1.0%. In Monday’s North American session, the pair is trading at 19.54, up 0.07% on the day.

Technical Analysis

After a strong downward push on Friday, USD/MXN has put some distance between the pair and the 19.70 line. If the peso can continue to strengthen, it could put pressure on support at 19.45. This line was relevant in mid-September, when the peso tested this line but was unable to consolidate below it. On the upside, there is resistance at 19.90, which is protecting the symbolic 20.00 level.

 

USD/MXN 4-Hour Chart

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.

 

The Week Ahead: Brexit, Trade Talks and FOMC Member Chatter in Focus

On the Macro

For the Dollar:

It’s a quieter week ahead on the economic calendar.

September wholesale inflation and inflation figures due out on Tuesday and Thursday will have the greatest influence.

On Tuesday, we can expect some influence from the JOLTs job openings, with quit rates likely to garner particular interest.

At the end of the week, prelim Michigan Consumer sentiment and expectation figures for October will also provide direction.

Outside of the stats, any updates from the resumption of high-level trade talks between the U.S and China will likely overshadow the stats.

There’s also impeachment chatter to consider.

The Dollar Spot Index ended the week down by 0.27% to $98.840.

For the EUR:

It’s also a relatively busy week ahead on the economic data front.

German factory orders, industrial production and trade data due out on Monday, Tuesday and Thursday will direct the EUR.

Finalized inflation figures out of Germany and Spain would likely have a muted impact on the EUR, however.

Expect a strong response from the EUR should the numbers impress. Forecasts are EUR negative.

On the geopolitical front, Brexit will also have an impact in the week.

The EUR/USD ended the week up by 0.35% to $1.0978.

For the Pound:

It’s a busy week ahead on the economic calendar.

Key stats include September’s Retail Sales Monitor and 2nd quarter Labour Productivity on Tuesday. On Thursday, GDP numbers and August industrial and manufacturing production and trade data will also influence.

The markets will likely brush aside house price figures due out on Monday and Thursday.

While we can expect the Pound to be responsive, Brexit and British politics will continue to overshadow the numbers.

The GBP/USD ended the week up by 0.32% to $1.2331.

For the Loonie:

It’s a relatively quiet week ahead on the data front.

Key stats include September employment change numbers and the unemployment rate due out on Friday.

Of less influence through the week is housing sector figures due out on Tuesday and Thursday.

Outside of the numbers, OPEC will also influence with updates from the October meeting likely to move oil prices.

The Loonie ended the week down by 0.51% to C$1.3314 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

Key stats include September business confidence and October consumer sentiment figures due out on Tuesday and Thursday.

We can expect the Aussie Dollar to be particularly sensitive to the numbers.

On Thursday, August home loans will also influence, with the RBA looking for continued improvement in the housing sector.

Outside of the numbers, expect updates from trade talks to also influence in the week.

The Aussie Dollar ended the week up by 0.10% to $0.6771.

For the Japanese Yen:

It’s a quiet week ahead on the economic calendar.

Key stats are limited to August household spending figures due out on Tuesday.

Influence on the Japanese Yen will likely be limited, however, as the markets look ahead to the BoJ meeting.

Outside of the numbers, expect market risk sentiment to play a hand in the week. Negative updates from trade talks would give the Yen a boost.

The Japanese Yen ended the week up by 0.91% to ¥106.94 against the U.S Dollar.

For the Kiwi Dollar:

Stats are on the quieter side in the week ahead.

Key stats include September Business PMI and electronic card retail sales figures due out on Friday.

Following the RBNZ’s lack of commitment to further rate cuts, expect dire numbers to weigh heavily on the Kiwi.

Outside of the numbers, risk sentiment will influence in the week.

The Kiwi Dollar ended the week up by 0.38% to $0.6320.

Out of China:

It’s a quiet week on the economic data front, with stats limited to September service sector PMI numbers. Sensitivity to service sector activity has built in recent years, so expect the numbers to influence.

The devil may be in the details, with new orders needing to hold up in September.

The Yuan ended the week down by 0.36% to CNY7.1483 against the Greenback.

Geo-Politics

Iran: It’s still up in the air on what’s next for Iran. News of Iran attempting to hack the 2020 Presidential Election campaign is unlikely to stir things up too much. Whether the Saudis sit back remains to be seen. The U.S President would certainly not want oil prices to spike but…

Impeachment: It’s a long road and there’s likely to be plenty of chatter before it could become a reality. Any vote on progressing the impeachment of Trump would be an interesting one, however.

Trade Wars: Trade talks resume this coming week. Some progress is going to need to be made to support the majors. Economic data was dire last week and a collapse in talks will put pressure on central banks to do more.

UK Politics: Talks resume on Monday. With the EU pushing for major changes to be made to last week’s proposals time, is running out. Johnson reiterated his stance on pulling Britain out of the EU at the end of the month, in spite of the Benn Act.

The Rest

The FED:  A mass of FOMC member speeches throughout the week will need considering. Following last week’s stats from the U.S, will there be the talk of a 2nd rate cut or can the unemployment rate give the FED a month or two to assess?

Weekly Wrap – A Heavy Economic Calendar Tested the Market Bulls

The Stats

It was a particularly busy week on the economic calendar in the week ending 4th October.

A total of 74 stats were monitored throughout the week, compared with 44 in the week prior.

Of the 74 stats, 24 came in ahead forecasts, with 41 economic indicators coming up short of forecast. 9 stats were in line with forecasts in the week.

Looking at the numbers, just 24 of the stats reflected an upward trend from previous figures. Of the remaining 50, 43 stats reflected a deterioration from previous.

With the economic data was skewed to the negative, the Dollar struggled in the week, as NFP and private sector PMI numbers missed the mark.

The U.S Dollar Index (“DXY”) fell by 0.27% to end the week at $98.840.

Out of the U.S

It was a busy week. September Chicago PMI figures kicked the week off. Particularly weak numbers had a relatively muted impact on Monday ahead of ISM PMI numbers later in the week.

Following some particularly dire manufacturing PMIs from the Eurozone, U.S manufacturing PMIs weighed on Tuesday.

An acceleration in the pace of contraction in the U.S manufacturing sector sent the markets into risk-off mode. The ISM Manufacturing PMI fell from 49.10 to 47.8 in September.

ADP nonfarm payroll numbers on Wednesday failed to shift sentiment. According to the ADP, nonfarm payrolls rose by just 135K in September, falling short of a forecasted 140k. A downward revision to August numbers didn’t help.

ISM non-manufacturing PMI numbers on Thursday also intensified risk aversion. The PMI fell from 56.4 to 52.6. As a key contributor to the U.S economy, a slide in the new orders sub-index from 60.3 to 53.7 was key to the Dollar demise.

Following dire manufacturing numbers earlier in the week, factory orders also influenced on Thursday. August’s orders fell by 0.1%, which was better than a forecasted 0.2%. Orders had risen by 1.4% in July…

If the markets were looking for some support, Friday’s nonfarm payroll and wage growth numbers failed to deliver.

Wage growth slowed from 3.2% to 2.9%, year-on-year, with only 136k nonfarm payroll jobs added. Economists had forecast an increase of 145k.

A fall in the U.S unemployment rate from 3.7% to 3.5% supporting risk appetite on the day.

The Dollar may have been the safe haven of choice, but weak stats and sentiment towards the U.S economy ultimately sank the Greenback in the week.

In the equity markets, it was a mixed week for the U.S majors. The Dow and S&P500 ended the week in the red for a 3rd consecutive week, while the NASDAQ gained 0.54%. The S&P500 and Dow fell by 0.92% and 0.33% respectively.

Out of the UK

It was also a busy week on the economic calendar.

Economic data included 3rd estimate 2nd quarter GPD numbers on Monday and private sector PMIs through the week.

While the UK economy contracted in the 2nd quarter, of greater concern was an accelerated contraction in the UK services and construction sectors.

The only good bit of news for the UK economy was a  slower pace of contraction in the manufacturing sector.

While the numbers were on the slide, however, UK politics and Brexit chatter were the key drivers.

The Pound ended the week up by 0.32% to $1.2331.

For the FTSE100, a stronger Pound added pressure on the 100, with the index falling by 3.65%.

Out of the Eurozone

It was a particularly busy week on the economic data front.

On Monday, Germany was in focus, with retail sales, unemployment and inflation figures providing direction.

It was a hopeful start to the week, with retail sales rising by 0.5% and unemployment falling by 10k.

Even the Eurozone’s unemployment rate fell from 7.5% to 7.4%.

Softer prelim inflation figures for September raised an early red flag, however.

On Tuesday, manufacturing PMIs hit risk sentiment. There was nothing positive in the numbers ultimately weighing on risk sentiment through to the service PMI numbers on Thursday.

A light economic calendar on Wednesday had little influence ahead of another slew of disappointing economic data on Thursday.

Service sector PMI and composites fell further, with Germany’s private sector sitting at the bottom of the Eurozone table.

The only positive on Thursday was a 0.3% monthly rise in the Eurozone’s retail sales.

While the numbers were dire in the week, U.S stats were even worse, ultimately giving the EUR support.

For the week, the EUR rose by 0.35% to $1.0978.

For the European major indexes, the DAX30 slid by 2.97%, with the EuroStoxx600 and CAC40 down by 2.95% and 2.70% respectively.

Elsewhere

It was a steadier week for the Aussie and Kiwi Dollars.

The Aussie Dollar rose by 0.10% to $0.6771, while the Kiwi Dollar gained 0.38% to $0.6320.

For the Aussie Dollar

It was a relatively busy week for the Aussie Dollar.

On the economic data front, private sector credit, trade data, and building approvals were negative ahead of retail sales figures on Friday.

Retail sales rose by 0.4%, month-on-month, in August. While falling short of a forecasted 0.5% rise, a rebound from a 0.1% fall in July eased the pain.

While the numbers skewed to the negative, a hawkish RBI rate cut delivered support on Tuesday.

The direction in the week ultimately boiled down to sentiment towards monetary policy divergence. Dire stats out of the U.S suggested that the FED may need to ramp up easing in the coming months.

For the Kiwi Dollar

The stats were skewed to the negative in the week. Business confidence weakened in the 3rd quarter and in September. Weaker confidence came in spite of RBNZ rate cuts, raising concerns over business investment near term.

Negative sentiment towards global trade weighed on business sentiment.

In spite of the negative numbers, however, upside came from the weak stats from the U.S.

For the Loonie

Stats included RMPI and GDP numbers in the first half of the week. Negative numbers failed to sink the Loonie, however, with economic data from the U.S offsetting the weak numbers.

At the end of the week, trade data and September’s Ivey PMI delivered mixed results. Whilst the trade deficit narrowed in August, Canada’s Ivey PMI slid from 60.6 to 48.7 in August.

The Loonie ended the week down by 0.51% to C$1.3314 against the Greenback, with sliding oil prices ultimately weighing.

For the Japanese Yen

It was a mixed start to the week. While August industrial production tumbled, retail sales bounced back in August.

Better than expected retail sales figures were unlikely to shift the BoJ’s planned monetary policy moves, however.

Sales tax hikes likely contributed to the August spike.

On Tuesday, a particularly busy day saw the Tankan numbers reflect weaker conditions in the manufacturing and services sectors.

The numbers may have been better than forecast, but weakness ultimately supported the BoJ’s anticipated easing.

On Thursday, the service sector PMI’s added to the market angst late in the week.

Risk aversion ultimately prevailed in the week, giving the Yen the upside against the Greenback.

For the week, the Japanese Yen rose by 0.91% to ¥106.94.

Out of China

It was a busy Monday ahead of a week-long holiday.

Key stats on Monday included September private sector PMI numbers.

Better than forecasted numbers provided support to the markets in the early part of the week before risk aversion took hold.

While the NBS non-manufacturing sector PMI slipped from 53.8 to 53.7, it was positive for the manufacturing sector PMIs.

The NBS manufacturing PMI rose from 49.5 to 49.8, with the Caixin manufacturing PMI rising from 50.4 to 51.4.

It may have been a positive for the numbers, but news of the U.S planning to pin back investments into China weighed.

The Yuan fell by 0.36% to CNY7.1483 against the Greenback.

GBP/USD, USDGBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD has posted slight losses on Friday. In the European session, the pair is trading at 1.2313, down 0.22% on the day.

British data has been soft this week. GDP declined by 0.2% in the second quarter and September PMIs indicated contractions in the manufacturing, construction and services sectors. Still, the pound has managed to post slight gains this week.  U.S. employment numbers disappointed. Nonfarm payrolls rose to 136 thousand, shy of the estimate of 145 thousand. Wage growth fell to a flat 0.0%, down from 0.4% in the previous release.

Technical Analysis

GBP/USD moved higher on Thursday and broke above resistance at 1.2320 and 1.2360. The pair briefly pushed into 1.24 territory before retracting. On Friday, 1.2340 is an immediate resistance line and could be tested during the day.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD has posted small losses on Friday. In North American trade, the pair is trading at 1.3321, down 0.12% on the day. With key events on both sides of the border on Friday, we could see some movement from USD/CAD in the North American session. Canada’s trade deficit improved slightly to C$1.0 billion, beating the estimate of C$1.1 billion. Over in the U.S., employment numbers were weak. Nonfarm payrolls fell to 145 thousand, while wage growth slowed to just 0.0%.

Technical Analysis

USD/CAD continues to test resistance at the 1.3320 line on Friday. On the upside, there is resistance at 1.3360. There is support at 1.3280.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN continues to lose ground. In Friday’s North American session, the pair is trading at 19.58, down 0.37% on the day.

Technical Analysis

The 19.70 line remains relevant and has switched to immediate resistance as the pair lost ground on Thursday and has posted further losses in Friday trade. The main trend is down, as the peso continues to gain ground. Above, there is resistance at 19.90, which is protecting the symbolic 20.00 level. On the downside, there is support at 19.20, which has held since August 1.

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.