Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 111.301 | EURUSD 1.15403 | AUDUSD 0.72486 | NZDUSD 0.66362 | USDCAD 1.30817 | USDCHF 0.98603 | GBPUSD 1.28122 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.15700 | 1.15349

USDJPY                 111.486 | 111.309

GBPUSD               1.28258 | 1.27994

USDCHF               0.98648 | 0.98544

AUDUSD              0.72899 | 0.72381

USDCAD               1.31034 | 1.30821

NZDUSD               0.66524 | 0.6620

EURCHF                1.14003 | 1.13779

EURGBP               0.90220 | 0.90079

EURJPY                 128.902 | 128.478

For today

• GBP: Another quiet start to the day and with a long weekend with a bank holiday on Monday the market struggled for direction testing through into Tokyo to the 1.2800 areas before slowly rising to push at the 1.2820 level and hold quietly through to the grey hour, Downside bids into the 1.2800 area with weak stops possible but likely to be light with stronger congestion through into the 1.2750 level with stronger bids likely to be lurking in the 1.2700 areas, topside offers light through to the 1.2900 areas with strong offers likely to be in depth through the level, a push towards the 1.2950 areas will likely see some weak stops appearing before heading into the stronger congestive 1.3000 level.
• EUR: A minor dip into the Tokyo session was soon reversed and the market moved off from the 1.1535 areas to push slowly through the session testing through to just short of the 1.1560 areas before holding steady into the grey hour, Topside offers light through to the 1.1600 areas with those offers continuing through to the 1.1620 areas with weak stops likely through the level, stronger congestive offers likely to show through the 1.1640-60 areas and increasing on a move through the 1.1680 areas through to the 1.1720 areas. Downside bids light through to the 1.1520-1.1500 areas, weak stops on a move through the 1.1480 level are likely to be a little thin and the market has plenty of room to move lower through to the 1.1440 levels before finding some supportive bids appearing into the 1.1400 areas with weakness quickly reappearing.
• JPY: USDJPY slowly rose from the opening around the 111.25 areas and pushed slowly through the day to struggle into the 111.50 areas for the move into the grey hour, Topside offers through the 111.80 areas and likely to increase on any move into the 112.00 level with those offers extending through to the 112.20 areas, a break through this level should likely see stronger stops appearing with some congestive offers from the 112.40 level with the resistance increasing the closer the market tests to the 113.00 areas. Downside bids light but congestive back through to the 110.80 areas, light support in the area and stops likely to be minimal with stronger bids not expected until the 110.00-109.80 areas these likely to be strong and strong stops on any significant break.
• AUD: A quiet opening with the market struggling for direction initially testing to the lows and basing along the 0.7240 levels for a good period of time before the selection of Morrison for PM saw the market quickly move through to the 0.7290 areas and hold quietly around the 0.7275 area to the grey hour. Topside offers light back through the 73 cent levels and the market free to move towards the 0.7340-60 congestive areas, a push through to the 74 cent level is likely to see stronger offers appearing and likely to be in depth through to the 0.7440-60 area and the top of the range from last month, downside bids light through to the 0.7220-00 areas with weak stops likely to be through the 0.7180 areas and opening the market to the 0.7150 and a stronger sentimental congestive level.

Overnight News

NZD:

RBNZ Orr: Evenly balanced on rate outlook

Orr: Very pleased with NZ exchange rate behaviour

Orr: We don’t rule out a cut interest rate

Orr: In no rush to be raising interest rates

Orr: Fundamentals for NZ are very positive

Orr: Biggest risk is business investment

Orr: Our biggest challenge is getting inflation to rise

Orr: NZ economy supported by exchange rate

Orr: Optimistic about global growth

RBNZ governor Orr speaks in Jackson Hole

USD:

Fed officials: Trump complaints won’t affect rate decisions

Powell takes stage in Jackson Hole as Draghi, Kuroda sit it out

Fed’s Kaplan says he is comfortable with four rate increases this year WSJ

USD/CNY:

US, China trade talks yield no major progress as tariffs bite

Hawkish White house china comments RTRS

Govts. Globally waking up to fact China’s economic inducements facilitate economic dependency and domination, not partnership White House statement

US will continue to oppose China’s destabilisation of cross strait relationship, political interference in Western hemisphere White House statement

AUD:

Dutton deemed not incapable of sitting in parliament SKY

Australia’s political chaos pushes rate hikes further off table BFW

Morrison to become PM replacing Turnbull and the least worst candidate

CNY/AUD:

China: Australian government made wrong decision over 5g ban SYH

SEK:

Sweden’s Social Democrats fear poll disaster FT

NAFTA:

Auto’s push talks into next week

Today’s data

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

NZD       Trade Balance Jul A -143M | C -400M | P -113M | R -288M

JPY         National CPI Core Y/Y Jul A 0.80% | C 0.90% | P 0.80%

06:00     EUR        German GDP Q/Q Q2 (F) C 0.50% | P 0.50%

08:30     GBP       BBA Loans for House Purchase Jul C 40.6K | P 40.5K

12:30     USD       Durable Goods Orders Jul (P) C 1.00% | P 0.80%

12:30     USD       Durables Ex Transportation Jul (P) C 0.30% | P 0.20%

Harry Hindsight

• GBP: USD buying through the day with Brexit, impeachments? And Australian political turmoil driving the markets, move into the Tokyo session holding around the 1.2915 opening highs before Tokyo saw the market selling off steadily through the Tokyo session testing through to the 1.2860 areas before slowing and moving into the grey hour pushing back a little to the 1.2875 level for the move into the London session, a small pause from the opening eventually saw the market dipping a little into the only piece of data for the UK and the market rallying quickly from the CBI number to almost close to the opening level and heading into the NYK session, NYK where steady buyers of USD’s again and the market in Cable soon saw the market testing the lows again and pushing through the 1.2850 areas triggering weak stops and a push to the 1.2820 areas and a slow grind to the close dipping to the 1.2805 areas but generally holding in a tight range.
• EUR: A similar pattern for the Euro and possibly leading the move a little, opening just below the 1.1600 areas the market moved into the Tokyo session and slid quickly through to the 1.1580 level before slowing the descent a little but continuing through to post the lows in the run to the grey hour testing the 1.1540 area, grey hour saw the market holding just above the 1.1550 areas and the move into the London session saw a more choppy period ranging from the 1.1550 level through to 1.1575 before moving a little higher into the NYK session where the market tested to the 1.1590 areas the range increased a little with the market unable to push beyond the highs and unable to break back below the 1.1550 areas until the end of London, once London had left the market dropped quickly through to the 1.1530 area and held quietly through to the end of the day.
• JPY: USDJPY was saw less movement through to the NYK session with the move into Tokyo rising steadily through to the 110.90 areas from the opening around 110.50 however, once there the market ranged through to the NYK session holding a tight range around the 110.85 area, mixed USD numbers didn’t slow the movement when it came and the USD rose quickly through to the 111.30 level and held in a tight range through to the close.
• AUD: The Oz opened quietly and dropped on the opening in Tokyo with Dutton still pushing Turnbull the uncertainty sent the Oz steadily lower dropping through the 73 cent level triggering some minor stops before holding the 0.7280 area through to the NYK session with a very tight range and everyone seemingly side lined and looking for clarity from the political shenanigans, the move into the NYK session did show a direction but the slide lower was gradual at best and fell through to the 0.7250 areas and running into congestion for the move to the close.

Yesterday’s premiership results

JPY         PMI Manufacturing Aug (P) A 52.5 | C 52.4 | P 52.3

EUR        France Manufacturing PMI Aug (P) A 53.7 | C 53.5 | P 53.3

EUR        France Services PMI Aug (P) A 55.7 | C 55.1 | P 54.9

EUR        Germany Manufacturing PMI Aug (P) A 56.1 | C 56.6 | P 56.9

EUR        Germany Services PMI Aug (P) A 55.2 | C 54.4 | P 54.1

EUR        Eurozone Manufacturing PMI Aug (P) A 54.6 | C 55.1 | P 55.1

EUR        Eurozone Services PMI Aug (P) A 54.4 | C 54.4 | P 54.2

GBP       CBI Realized Sales Aug A 29 | C 13 | P 20

EUR        ECB Monetary Policy Meeting Accounts

USD       Initial Jobless Claims (AUG 18) A 210K | C 215K | P 212K

USD       House Price Index M/M Jun A 0.20% | C 0.30% | P 0.20% | R 0.40%

USD       Manufacturing PMI Aug (P) A 54.5 | C 55.1 | P 55.3

USD       Services PMI Aug (P) A 55.2 | C 55.9 | P 56

USD       New Home Sales Jul A 627K | C 651K | P 631K | R 638K

EUR        Eurozone Consumer Confidence Aug (A) A -2 | C -1 | P -1

USD       Natural Gas Storage A 48B | C 47B | P 33B

 

 

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