Dollar Down On Monday
The US dollar has kicked-off the week in a quiet fashion with the USD index hovering around the 98.10 level as of writing. The index is down slightly off last week’s highs though remains supported on the back of better US data seen last week. All eyes will be on the headline CPI reading due in the middle of this week. A strong result should see USD continue higher while any disappointment could see the correction deepen.
EUR Higher on USD Weakness
EURUSD starts the week in the green as weakness in USD allows the single currency to advance, for now. This week, the domestic data focus will be on a slew of German readings with ZEW Economic Sentiment and preliminary GDP readings due. Given the ongoing concern for the health of the Eurozone economy, any further German data weakness should see EUR lower again. EURUSD trades 1.1024 last.
UK Elections Race Intensifying
GBPUSD is benefiting from USD weakness also with price managing to hold above the 1.2782 level support for now. The latest opinion polls show the Conservative party opening up its lead on Labour heading into the December elections, weighing on GBP for now. This week, the key data focus will be Q3 GDP which holds the potential to confirm a technical recession in the UK if we see further negative reading.
SPX500 Pauses Near Highs
Risk assets have started the week on a softer footing. Trump was active over the weekend denying reports that he had agreed to roll-back on tariffs on Chinese goods in a bid to get a deal done. However, the president did say that talks are going well and that China is ready to make a deal. Traders are expecting the two sides to sign off on a deal at the APEC meetings in Chile this coming weekend. SPX500 trades 3080.43 last, just down off last week’s fresh all-time highs.
JPY & Gold Higher
Safe havens have seen better demand across the European morning on Monday. A combination of a weaker USD and softer equities prices have seen both JPY and gold higher against USD. USDJPY trades 108.96 last, still atop the 108.84 level for now. XAUUSD trades 1465.86 last, remaining within the falling wedge pattern for now after breaking down through the 1481.93 level last week.
Crude Under Pressure
Oil prices have been firmly lower at the start of the week reflecting disappointment in Trump’s confirmation that he has not agreed to roll-back tariffs on Chinese goods. With risk sentiment a little subdued at the start of the week, crude is trading lower at 56.30 though remains above the 55 mark for now.
USDCAC Quiet Amidst Cross-Flows
USDCAD has been a little lower today also, retreating from last week’s highs. For now, it seems that USD weakness is having more of an impact than lower oil prices. However, at around 1.3221, flows remain very quiet so far today.
AUD Holds Above Support
AUDUSD has been a little higher against the US dollar so far on Monday. Trading .6864 last, price is holding above the .6850 level for now following the rejection from the bearish trend line from 2018 highs. Unemployment rate data on Thursday will be the key domestic data focus, expected unchanged at 5.2%.