FOREX 4 minutes to read

NY Open: Trump circus comes to Argentina

Summary:  Financial markets do not appear to be holding out much hope for a resolution of Sino-US trade hostilities at the G20 summit.


President Trump is in the centre ring at the G20 circus in Buenos Aires, Argentina. Markets are hoping for a thaw in trade hostilities between China and the US. However, this morning’s price action suggests traders don’t have a lot of confidence in that view. Trump may (or may not) meet with Russia President Putin. Ukraine issues have returned to the front pages as have Trump’s business dealings with Moscow.

The US dollar has posted small gains (as of 13:45 GMT) against the major G10 currencies since the open. EURUSD, dropped the most, supported by a jump in Chicago PMI. (Actual 66.4 versus a forecasted 59.4).

USDCAD had a moment of volatility as well. Prices whipsawed in a 1.3274-1.3325 range when Canadian GDP data were released. September GDP was -0.1% (forecast at 0.1%) while Q3 GDP was as expected, at 2.0%. The currency pair quickly returned to pre-data levels. 

November was a volatile month for FX, and the US dollar is finishing it on a mixed note. The New Zealand dollar was the best performing currency gaining 5.45%, supported by a series of strong economic reports. The Canadian dollar was the weakest of the G10 majors, losing 1.30%, due to sharply weaker oil prices, which lost 22% in the month. GBPUSD was extremely whippy in a 1.2690-1.3175 range for the month but is finishing virtually unchanged.

Wall Street opened with minor losses but barring a major meltdown will close the week on an up note. Traders are cautious ahead of the trade talks at the G20 meeting on the weekend

Oil prices have extended European losses. WTI broke the $50.00/barrel level again, touched $9.68/b and is now sitting at $49.84/b. Traders are concerned that even if Opec manages to agree to production cuts, they won’t be enough to offset rising global supplies.

The week ahead is the beginning of the end – for 2018. Seasonal holidays make it a very short month, but a lot of significant events and data are crammed into the available days. The US employment report is expected to be robust with forecasters predicting a gain of 220,000 jobs. Eurozone PMI data is on tap while EU/Italy budget talk headlines and Brexit news are the wild cards. The Reserve Bank of Australia meeting is Tuesday, and it's widely expected to leave rates unchanged. The Bank of Canada meeting is Wednesday and like the RBA, it is expected to leave rates unchanged. The quarterly Monetary Policy Report is also released.
GBPUSD (hourly, source: Saxo Bank)
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)