NY Open: Forex can't find traction
FX markets are a tad choppy but ultimately directionless. Traders seem to have digested all the bad news about Turkey. Contagion risks remain, but USDTRY is well below the 6.9550 peak. Prices are currently trading at 6.5325. Turkish President Recep Tayyip Erdogan said that Turkey would boycott electronic products from the US, which clearly isn’t an attempt at defusing tensions with America.
Wall Street liked the Turkish lira rally, and the three major indices opened in positive territory. News that Home Depot (HD: NYSE) beat Wall Street forecasts helped with the positive statement.
WTI oil prices were higher in early New York trading, rising from the opening level of $67.84/barrel to $68.34/b. Prices were boosted by a report that Saudi Arabia cut production by 200,000 barrels/day in July. The production cut and the prospect that Iran supplies may be sanctioned supported prices. However, concern about slowing global demand, sparked by the China/US trade war, led to selling, and WTI is currently trading at $67,80/barrel.
USDCAD traders are ignoring the ebbs and flows of oil prices, in part because Canadian major crude export, Western Canada Select (WCS) trades is trading at a CAD$35.48 discount to WTI.
EURUSD inched higher in early New York trading but couldn’t crack minor resistance at 1.1420 and prices drifted steadily lower. A break below 1.1360 suggests further losses to 1.1310. EURUSD price action is just noise with traders waiting for tomorrows US economic reports which include Retail Sales.
USDJPY opened with a negative bias as is hovering above minor support at 110.70. If broken it would suggest further losses to 110.00. Traders are reluctant to buy USDJPY because of the ongoing geopolitical risks. The US tariffs on China can take effect as early as August 31. The US is still feuding with Iran, Russia, Mexico, Canada, and Turkey.