USD Down – Powell In Focus
The US dollar has been a little weaker over the European session so far on Tuesday. Data weakness in the US last week has seen upside capped for now with the dollar index remaining congested around the 98.60 level. Looking ahead this week, Fed chair Jerome Powell speaks and his comments will be closely watched as the October FOMC comes into view. FOMC meeting minutes and CPI later in the week will also provide volatility.
EUR Rallies on Weak USD
EURUSD has been firmer against USD today in light of the ongoing pullback in the greenback. Looking ahead this week, the September ECB meeting minutes will be the key focus as traders try to assess the likelihood of further ECB easing this year. EURUSD trades 1.0990 last with price nearing a retest of the 1.1025 level.
Johnson’s Brexit Deal “Impossible”
GBPUSD has been firmly under pressure today. Despite the softness in USD, GBPUSD has traded back down to 1.2234 following yesterday’s rejection at the 1.2382 level. GBP has been heavily sold on reports that Johnson’s deal with the EU is “essentially impossible” to complete on the back of a phone conversation with German chancellor Merkel.
Risk Sentiment Rocked
Risk assets have come under pressure today also as the market digests the news of the US pulling out of the Turkish/Syrian border region ahead of a planned Turkish invasion of Syria. The move has raised concerns over fresh violence in the Middle East following four years of the US being active in the area. SPX500 trades 2921.38 last having broken back down below the 2932 level.
Gold & JPY Soar on Safe Haven Inflows
Safe havens have been firmly higher today as a mix of negative Brexit headlines and fresh Middle East fears combine to weigh on investor sentiment, driving both gold and JPY higher against USD. USDJPY trades 106.75 level. XAUUSD trades 1503.63 last as price continues to push back towards the 1522.75 level.
Oil Falls Despite Middle Tensions
Oil prices, for now, remain subdued despite the fresh Middle East concerns. Crude has been heavily sold since the failure above the 60.09 level last month as worries for the health of the global economy and consequently, the global oil demand outlook, have kept flows bearish for oil. Crude trades 52.35 last, still sitting above the 51.28 level for now.
USDCAD has been sharply higher today as weakness in risk markets has weighed on the commodity-driven CAD. USDCAD trades 1.3312 last with price having rallied back above the 1.33 level once again. While above here, focus remains on a further push higher.
Gold Holds AUD Up
AUDUSD is holding up today, despite the general risk-off tone to trading. Moves higher in gold are helping keep AUD supported as are quiet hopes about the upcoming US/China trade talks at the top of the week. AUDUSD trades .6745 last as price continues to hold above the .6690 level.