USD Climbing Despite Weak Data
The US dollar has been firmly higher over the European morning on Thursday despite weaker than expected data yesterday with the Chicago PMI coming in below market forecasts.
The pullback in equities today is lending USD some support, with the USD index trading at 98.32 last. With no domestic tier-one data due over the remainder of the week, USD flows are likely to remain linked to US-China trade deal headlines and movement in equities.
EUR Lower on USD Rally
EURUSD has moved lower over the morning on Thursday as a rally in the US dollar sets the tone for G10 trading. The near term outlook for the euro remains bearish in light of recent data weakness, which is keeping ECB easing expectations elevated.
EURUSD trades 1.1003 last, still below the 1.1024 level for now.
GBP Falls on Brexit Uncertainty
GBPUSD has been sharply lower today in light of the uptick in USD strength. On the elections front, a key poll has shown that the Conservative party on course to win a majority. Such an outcome would greatly increase the chances of the UK leaving the EU on January 31st next year as per Boris Johnson’s deal.
However, the risks of a no-deal Brexit would once again be introduced, which is weighing on GBP for now. GBPUSD trades 1.2906 last.
SPX500 Off Highs
Risk assets have been lower today despite increased optimism over the prospect of an imminent US-China trade deal. The latest reports continue to point to a deal happening in the near term as both sides say that they are in the final stages of negotiations.
SPX500 trades 3148.48 last, having fallen back from the fresh record highs printed yesterday.
Safe Havens Lower
Safe havens have been weaker today in light of the fresh optimism over a US-China trade deal. Both the Japanese yen and gold have been lower against the US dollar in light of the fresh move higher in equities over the last 24 hours.
XAUUSD trades 1455.09, moving back towards the week’s lows. USDJPY trades 109.49 last, heading back up towards the week’s highs.
Fifth Consecutive Weekly EIA Inventories Rise
Oil prices have remained resilient over the last 24 hours with price recovering off overnight lows to trade 57.84 last. The EIA report released yesterday showed another build in US crude stores last week, marking the fifth straight week of surpluses.
However, the downside impact of the report has been offset for now by optimism over US-China trade talks. While a deal is still expected, crude is likely to remain supported.
Loonie Capped by 1.33
USDCAD has been lower today, despite the strength in USD as resilient oil prices and optimism over US-China trade talks keep the Canadian dollar supported.
USDCAD tested the 1.33 level this morning, which is so far holding as resistance. Above here, however, and focus will shift to the 1.3345 level next.
Aussie Higher Despite Weaker Dollar
AUDUSD has been firmer today also, benefiting from a better tone to risk assets. Though equities have softened a little today, the backdrop remains encouraging. A US-China trade deal would be strongly positive for AUD.
AUDUSD trades .6768 last, despite a weaker than expected [rivate capital expenditure figure released overnight.