The G-10 rundown
USD – the USD trades as a safe haven against EM and the riskier corners of the FX world when risk off is afoot, but underperforms CHF and JPY.
EUR – the euro dribbling back lower versus the greenback and needs to put in a rally here to avoid a test into 1.1000 in EURUSD. USD liquidity issues could pressure USD higher here as well until the Fed gets the plot and brings massive easing. EURUSD is the key for whether the USD moves to new highs on a broad basis and ushers in an eventual response from the Fed and more importantly – the Trump administration.
JPY – USDJPY is wilting back lower, a move that may be set to continue if the market confidence slips. Beyond 105.00 to the downside and we are back to a full-fledged sell-off that negates the impression after yesterday’s close that the pair was trying to stage a bullish reversal.
GBP – sterling remains steady here as the UK side has now said that it will not pay the £39 billion divorce settlement in the event of a no deal Brexit.
AUD – the AUDUSD unbearably rangebound for crowded bearish positioning over the last three (!) weeks – and serves as a general barometer in FX on the temperature of US-China relations.
CAD – the loonie is likely over-performing here if risk sentiments slips again, and have a hard time seeing Canada’s yields continuing to outperform US yields, but certainly the latest sell-off underlines that the 1.3300+ resistance area has held for now.
NZD – the kiwi still a weak performer, only set to rebound on a dramatic change in the global sentiment.
SEK and NOK – plenty of disappointment here as the revival of risk sentiment to start the week provided no real boost here – the pivot levels are 10.00 in EURNOK and 10.80 in EURSEK. (Sweden Household lending data today interesting, by the way, as a pointer on recession risk rising there.)
Upcoming Economic Calendar Highlights (all times GMT)
- 0730 – Sweden Jul. Household Lending
- 1200 – Hungary Central Bank Rate Decision
- 1300 – US Jun. S&P/CoreLogic House Price Index
- 1400 – US Aug. Consumer Confidence