2019-11-11 • Updated
Today’s Asian session has been something of a variation on a theme with a bit stronger USD, lower commodity currencies, higher euro and soft pound.
The euro was a winner of today’s session following the win of independent candidate Emmanuel Macron in the first French election debate. It seems that broad fears of populist drift in European politics have eased a bit. Technically, the current recovery may extend towards 1.0825 from present 1.0755. A pullback below 1.0670 would indicate the restoration of the bearish trend. Today’s focus will be on two Fed speeches both delivered from monetary policy hawks – Loretta Mester and Esther George neither, voters this year on the FOMC.
USD/JPY gained on the session having risen to 112.85. A move above 113.5 would signal us that prices entered the bullish phase. The news flow is really light. Japan’s banks are back from holiday today. Japan’s PM Abe and German Chancellor Merkel ranged themselves against advoсates of protectionism.
AUD/USD edged down to 0.7700 having erased its yesterday’s gains. Commodities are trading lower. Another headwind was the RBA March meeting minutes that was quite dovish. The current undertone is neutral. Aussie might choose trading sideways in the range of 0.7660/0.7740. A drop below the support at 0.7630 would indicate the restoration of the downtrend.
Kiwi, in general, little changed on the session having slipped to 0.7032 from yesterday’s high at 0.7070. Today’s special focus will on the Global Dairy auction. Kiwi took some heat last time when dairy prices dropped 6.3%.
GBP/USD slid to 1.2360 mainly on the news that Article 50 will be triggered on March 29. It will launch the two years of talks between the EU and the UK. Sterling traders will be interested in tonight’s CPI release scheduled for 11.30 MT time. The inflation figures are expected to rise from 1% to 1.8% and core inflation from 1.6 to 1.7%. A disappointing release can sand prices to 1.2333 or lower towards 1.2320.
USD/CAD spiked to 1.3360 in the course of the past session. The US dollar has a room for further appreciation. The immediate resistance is located at 1.3420. Loonie’s watchers will cast their eyes on the Canadian retail sales report and current account data. On the downside, there were several sturdy supports at 1.3280 and 1.3210.
Oil prices edged higher towards $51.87 after investors renewed their expectations that OPEC and non-OPEC members extend their output cuts beyond the official deadline – June.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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