Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.346 | EURUSD 1.19224 | AUDUSD 0.79332 | NZDUSD 0.7240 | USDCAD 1.24818 | USDCHF 0.95667 | GBPUSD 1.2881 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.19598 | 1.19172

USDJPY                 109.378 | 109.027

GBPUSD               1.29130 | 1.28742

AUDUSD              0.79496 | 0.79318

USDCHF               0.95792 | 0.95484

USDCAD               1.24859 | 1.24671

NZDUSD               0.72560 | 0.72344

EURGBP               0.92664 | 0.92484

EURCHF                1.14216 | 1.13947

EURJPY                 130.709 | 129.984

For today

• EUR: Opening above Fridays close as a result of the commentaries from Jackson Hole the market rose a little to test towards the 1.1960 areas before profit taking moved into the market and slipping back to hold the 1.1920 areas on what had been heavy volume initially. Topside offers continue through to the 1.1980-1.2000 areas with some of the major banks signalling further gains to the 1.2500 levels however, for the moment with a UK bank holiday is likely to see volumes slipping a little until the opening in NYK. Downside bids likely to be light through to the 1.1820-00 areas with weak stops are likely to open up the downside with congestion awaiting below that level.
• GBP: Opening above the 1.2900 areas with initial attempts to the 1.2920 and sliding steadily lower through to the 1.2880 areas on decent volume before holding into the grey hour, Topside offers into the 1.2950 areas with congestion through to the 1.3000 areas where there is a likelihood of stronger offers and limited stops, the congestion is likely to continue through the level with strong offers again into the 1.3050 areas.
• JPY: USDJPY made early gains from a low opening to fill the gap on the charts, pushing from the 109.20 areas and then testing the 109.40 areas before falling quickly back from the level and holding for the most part to hold the 109.10 areas with a brief attempt at the figure levels, Topside offers through the 109.80 areas and into 110.00 stops likely on a push through the level and opening up the topside in a limited fashion, Downside bids into the 109.00 areas are likely to be light however, a move through the level is likely to see increasing bids on a move towards the 108.50 areas, with possibly larger stops on a move through the level opening further losses towards the 108.00 areas, limited data and a UK bank holiday could see ranges contained.
• AUD: A quiet day overall range wise with the Oz opening slightly weaker and then trading into the Tokyo session testing the 0.7950 areas from that opening just below the 0.7930 area. The market drifted once into the Tokyo session with the market slipping back to hold around the 0.7935 areas moving into the grey hour, Topside offers remain through to the 0.7960 areas with only a brief opening before further offers start to increase into the 0.7980-0.8000 areas and although the market has been through the level once this month the market is still likely to see offers through the level and into the 0.8040 areas with very little in the way of stops suspected, a push beyond the 0.8060 level could see stronger buying appear however, this is possibly for another day, Downside bids light through to the congested 0.7880-0.7910 areas with weak stops likely to appear only on a strong move through the 0.7840 level and then some further bids likely to contain the move into the 78 cent areas.

Overnight News

AUD:

Westpac puts new squeeze on home buyers

USD:

Fed’s Mester says keep up the gradual pace on rate hikes

Tillerson keeps distance from Trump’s race row stance

Houston battles massive floods, Trump set for Tuesday Texas trip

GBP:

Britain pushes for talks about the further, EU wants divorce first

EUR:

Merkel out of touch says challenger as vote nears

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

08:00     EUR        Eurozone M3 Y/Y Jul C 4.90% | P 5.00%

12:30     USD       Wholesale Inventories Jul (P) C 0.30% | P 0.70%

12:30     USD       Advance Goods Trade Balance Jul C -64.5B | P -64.0B

Weekend News

JPY:

Kuroda: BoJ needs to continue with very accommodative policy

Kuroda: Japan’s recent 4% GDP Growth unlikely to be sustained

EUR:

Draghi: ECB isn’t there yet on inflation, must remain on guard

Draghi says, QE has worked very well

Latest poll in France shows dissatisfaction in Macron

USD:

Powell: Heartened by Mnuchin comments on getting debt deal

Mnuchin: Debt ceiling will be raised

Yellen: Algorithmic traders a larger presence in the markets

Kaplan: My views on terminal rate are lower than 2 years ago

GBP:

UK Labour party have eventually come of the fence and will campaign to keep Britain in the EU single market

Second arrest after attack on Police near Buckingham palace on Friday

Harry Hindsight

• EUR: A very quiet session through much of the day with the market trading through the Asian session holding around the 1.1800 areas, the move into the London session saw the market lifting above the figure area to hold through into the NYK session and the Jackson Hole commentaries started to impact the market testing quickly to the 1.1860 areas and hitting some strong offers and struggling through to the 1.1880 level however, break it did with another quick move higher to push to a 2 ½ year high above the 1.1940 level before holding around the 1.1920 areas into the close.
• GBP: A slow rise through the Asian session moving off the 1.2800 level and pushing into the London session all of 10 pips higher, the move into the London session saw the market rising a little faster and into the NYK session the market touched the 1.2840 levels and the commentary started, the move in the Euro saw the Cable rising as a consequence with the market pushing quickly from the 1.2820 levels to 1.2850 then pushing steadily through the level to trade to the 1.2880-90 areas and holding through to the close.
• JPY: A quiet opening saw the market test quickly through the 109.60 areas pushing just above the 109.75 level before holding quietly through to the Jackson Hole commentaries, initially testing to the 109.85 areas before dropping quickly back to the 109.35 level and then slowly descending into the London close to the 109.10 areas and slowly moving back to a close around the 109.35 level.
• AUD: Opening around the 0.7900 areas the market drifted through the Asian session testing to the 0.7885 level before rising slowly through into the London session to the 0.7920 areas, the move through to NYK was slow and tedious and not until the Yellen speech did the market truly move, quickly pushing through to the 0.7955 areas before ranging in an ever decreasing range to the close.

Yesterday’s premiership results

JPY         National CPI Core Y/Y Jul A 0.50% | C 0.50% | P 0.40%

JPY         Tokyo CPI Core Y/Y Aug A 0.40% | C 0.30% | P 0.20%

JPY         Corporate Service Price Y/Y Jul A 0.60% | C 0.80% | P 0.80% | R 0.70%

EUR        German GDP Q/Q Q2 (F) A 0.60% | C 0.60% | P 0.60%

EUR        German IFO – Business Climate Aug A 115.9 | C 115.5 | P 116

EUR        German IFO – Expectations Aug A 107.9 | C 106.8 | P 107.3

EUR        German IFO – Current Assessment Aug A 124.6 | C 125 | P 125.4 | R 125.5

USD       Durable Goods Orders Jul (P) A -6.80% | C -5.80% | P 6.40%

USD       Durables Ex Transportation Jul (P) A 0.50% | C 0.40% | P 0.10%

Stay lucky

Andy

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