Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 111.077 | EURUSD 1.16784 | AUDUSD 0.73487 | NZDUSD 0.66965 | USDCAD 1.29662 | USDCHF 0.97994| GBPUSD 1.28924 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16972 | 1.16694

USDJPY                 111.358 | 111.052

GBPUSD               1.29019 | 1.28707

USDCHF               0.98094 | 0.97921

AUDUSD              0.73547 | 0.73265

USDCAD               1.29791 | 1.2950

NZDUSD               0.67122 | 0.6684

EURCHF                1.14548 | 1.14403

EURGBP               0.90692 | 0.90563

EURJPY                 130.048 | 129.704

For today

• GBP: The move into the Tokyo session saw some limited selling to the 1.2890 area before a steady drive through to test above the 1.2900 area pressing just through before quickly dropping off as if the market ran a little scared holding the 1.2880 level briefly before slowly drifting through the session into the grey hour holding just above the 1.2870 levels. Topside offers through the 1.2900 areas likely to be a little light with stronger offers possibly through into the 1.2950 areas however, both levels are more or less just sentimental levels, once those two levels are broken the market is likely to open a little with congestion around the 1.3000 areas and stronger offers on a move through the level, downside bids light through to 1.2850 with some limited bids with stronger bids starting towards the 1.2800 levels with congestion likely to continue through the level with limited stops.
• JPY: After a quiet session yesterday, the buyers reappeared today in a limited fashion with the market running from the opening just below 111.10 and steadily pushing through into the Tokyo session to test through to the 111.35 levels before running into the same offers from yesterday and dropping back to the 111.25 levels for the move into the grey hour, light bids around the 111.00 areas with those likely to continue on any move lower weak stops a possibility on a clear break of the 110.80-70 areas but with congestion likely to continue through to the 110.50 stronger bids with the congestion possibly continuing through to the 110.00 area. Topside offers congested on any attempt at the 111.80 areas with stronger offers then starting to move into the market on any move towards the 112.00 area a clear break will trigger some weak stops and a run to the 112.40-60 level is possible however, from there the market is likely to see stronger offers appearing all the way through to the 113.00 area.
• EUR: Opening quietly and moving through into the Tokyo session pushing slowly through to test towards the 1.1700 level but running into problems in the high 1.1690’s before dropping back a little quicker and ranging for a long period through to the grey hours around the 1.1675 areas. Topside congestion through the 1.1700 levels and likely congestion through the level and into the 1.1740 areas before weak stops are likely to appear, congestion is likely to continue through to the stronger 1.1780-1.1800 areas with possibly strong offers in the area. Downside bids light through to the 1.1600 areas with some light congestion through to the 1.1580 areas before weak stops appear and the market runs through to the 1.1560-40 areas with weakness then through to open up a deeper move.
• AUD: Ranging around the opening 0.7350 levels the market was unable to push much beyond the level and after a few hours of trying dropped back to the 0.7330 areas and hold there to the grey hour, Topside congested through to the 0.7440 areas and although there may be some weakness through the 0.7460 areas the market quickly fills in with stronger offers on any approach to the 75 cent levels, downside bids light through the 73 cent areas with some light congestion around the area and continuing through to the 0.7260 area, stronger bids then come into play on any test to the 72 cent areas.

Overnight News

USD/MXN:

Pres. Trump tweets. A big deal looking good with Mexico

USD:

Trump urges China to just say yes to US trade demands

Not the right time to talk with China about two nations trade war Trump

CNY:

China Yuan exchange to keep stable Daily Commentary

Early indicators show China’s economy weakening again in August

China suddenly has trouble building things WSJ

Intervened three times in FX markets in August SAFE

AUD:

ANZ confidence index rises to 116.5 vs. 114.1

USD/CAD:

US may use auto tariffs if Canada refuses trade deal Kudlow

EUR:

Italy’s Di Maio threatens certain EU budget veto over migration demands

TRY:

Turkey to suffer a brutal credit crunch says a new report Forbes

CNY/USD:

Chinese owned co. said to have hacked Clinton server Daily Caller

GBP:

Theresa May signals Brexit no deal not the end of the world

Today’s data

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

08:00     EUR        Eurozone M3 Money Supply Y/Y Jul C 4.40% | P 4.40%

12:30     USD       Advance Goods Trade Balance (USD) Jul C -68.6B | P -67.9B

12:30     USD       Wholesale Inventories M/M Jul (P) C 0.10% | P 0.10%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jun C 6.40% | P 6.50%

14:00     USD       Consumer Confidence Index Aug C 127 | P 127.4

Harry Hindsight

• GBP: A small gap on the opening saw the market slowly moving up from the 1.2840 areas to test on a spike above the 1.2860 level, the move through to the London session was quiet with a range between 1.2850-60 levels, with the UK on holiday the market dipped into the opening to make the low before lifting off the 1.2830 and holding through to early NYK around the 1.2840 level again, Early NYK made short work of making it back to the opening levels and triggered light stops on a move through the highs to push quickly to the 1.2880 areas before slowing its ascent, the move through to the close saw a slow rise to test the 1.2900 level before holding in a quiet 1.2890-1.2900 range through to the close.
• JPY: Moving quickly higher from the opening to test towards the days highs around the 111.35 level the market dropped back after the initial run to hold the 111.25 level into Tokyo, early buyers again tested the topside with the fix before the market dropped back to 111.20 paused and then ran lower again dropping quickly through to the figure level and dipping through lightly before starting a limited recovery through into early morning in London, testing the 111.20 areas the market was unable to recapture the highs and slowly slid back off through into the NYK session testing the lows for a second time before rising for a quiet range through to the close holding around the 111.00 areas.
• EUR: Lacklustre trading through the Asia saw the market initially testing above the 1.1650 levels in early Tokyo having opened unchanged on the day, the highs reached saw the market slide slowly lower through to the 1.1620 areas, the move into the grey hours saw light selling and the market testing to the lows of the day just sneaking through the 1.1600 areas before rising slowly to the 1.1620 in a very quiet UK session, the opening in NYK saw the Euro start a slow and steady rise through the session pushing to the 1.1690 areas before running out of steam and holding quietly just below the level to the close.
• AUD: Opening a little higher the market moved steadily through into the Tokyo session running to the 0.7345 areas with early enthusiasm for the new PM however, once the Tokyo fix was over with that enthusiasm disappeared and the market dipped back on comments from China who are still perturbed over the G5 ban they got, testing to the 0.7320 levels the market held relatively quietly through to the London sessions dipping through to the 0.7310 levels to make the lows before heading into the NYK session and replicating the Euro with a steady rise through to the 0.7360 level and holding quietly through to the close.

Yesterday’s premiership results

EUR        German IFO Business Climate Aug A 103.8 | C 102 | P 101.7

EUR        German IFO Current Assessment Aug A 106.4 | C 105.5 | P 105.3

EUR        German IFO Expectations Aug A 101.2 | C 98.5 | P 98.2

 

 

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