FOREX 4 minutes to read

Complacency breeds contempt

Summary:  FX markets are relatively static while global risks are in a state of flux.


The G-10 major currency pairs are currently trading within 0.55% from where they opened against the US dollar in New York on Monday. The exception is NZDUSD. It has dropped 1.08% due to bearish technicals and rising rate cuts risks. The Reserve Bank of New Zealand hinted that it would chop rates as early as its May 8 policy meeting.

GBPUSD traders are biding their time until either the UK crashes out of the EU without a deal or manages to get a long-term extension to Article 50 while juggling concerns about a snap election, a new Labour government, another referendum or a combination of all of the above. Depending on what transpires, GBPUSD could see 1.3600 or 1.2600.

EURUSD has been worse than lethargic. The single currency has shuffled between 1.1183 and 1.1253 all week. Numerous European Central Bank officials have reiterated a dovish outlook for monetary policy in the past week which combined with soft economic data, has weighed on prices.

Today’s Weekly Jobless Claims of 202,000 set a new 49 year low. If tomorrow’s nonfarm payrolls report can show an upside surprise (forecast 180,000) FX complacency may disappear.

Wall Street has added to yesterday’s small gains led by a 134-point rise in the Dow Jones Industrial Average. Prices could soar if President Trump’s and China Vice Premier Liu He's, post-trade talk meeting results in promises of a pending trade deal.

Tesla is suffering from too few car deliveries and too many tweets. TSLA: Nasdaq shares are down 8.34% as of 1415 GMT after the carmaker admitted yesterday evening that it delivered only 63,000 vehicles in the first quarter, rather than the 76,000 analysts were expecting. CEO Elon Musk is in court today for tweeting about delivering 500,000 cars in 2019 which could be construed as “stock pumping”, especially in light of yesterday’s delivery announcement.
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Chart: NZDUSD 30- minute, one week. Source: Saxo Bank
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