FX Trader, Loonieviews.net
Summary: The USD is going nowhere in a hurry as the market awaits some fresh data to enliven the scene. Meanwhile, Wall Street is clawing back opening losses and oil prices have snapped last week’s downtrend.
“Dollar up, dollar down, positions are moving ‘round and ’round.” American’s and Canadian’s returned to work after a long weekend and found plenty of angst, an empty data cupboard and little reason to get involved.
The US dollar at 1400 GMT is relatively unchanged since the New York open despite somewhat choppy trading. EURUSD broke below 1.1460 support, touched 1.1433 and is hovering around 1.1450. Prices are weighed down by ongoing risk aversion trades due to US/China trade concerns, yesterday’s China equity melt-down and rising Treasury yields.
Being a “slow news day,” the US dollar may have gotten a bit of support from Dallas Fed President Robert Kaplan who said he was comfortable with three more rate hikes over the next year, as it reminded traders that ECB rates weren’t going anywhere until next summer. The EU and Italy budget disagreement is another EURUSD negative. The intraday EURUSD technicals are bearish while prices are below 1.1500, a level being guarded by minor resistance in the 1.1460-70 area. A break below 1.1420 targets 1.1290.
Wall Street is clawing back opening losses. The Nasdaq is in positive territory, S&P 500 is flat and the DJIA, while in the red is above its worst levels. The improvement came as 10-year Treasury yields slipped from their European peak.
Oil prices snapped last week’s downtrend. WTI rallied from $73.08/barrel yesterday to $74.99/b just before the New York opening thanks to Hurricane Michael interrupting US Gulf coast production. Prices were also supported by reports that Iran crude exports had fallen. The Canadian dollar is not getting any support from the higher prices due to the enormous discount between Western Canada Select (WCS) and WTI which touched CAD 53.25 on Friday.
Chart EURUSD 30 minute
The end of the road
Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage, as Crown Prince Mohammed bin Salman manages to create a World Champions League, after buying the UEFA Champion League franchise.
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)
