USD Rally Capped For Now
The US dollar has softened a little over early trading on Tuesday as the rally in equities has taken some of the steam out of the greenback’s recent rally. The US data sheet remains quiet until Thursday and Friday when we get CPI and Retail Sales respectively. If these readings continue the recent strength in US indicators, this could fuel fresh buying in USD. The index trades 98.71 last.
Fresh EU Fears For EUR
EURUSD has been a little firmer today with the Euro benefiting from weakness in USD. However, the move is very shallow and the outlook remains bearish for EUR. The results of the 2020 Irish general election have raised fears of further fracturing of the EU given the win for Irish unity party Sinn Fein. EURUSD trades 1.0912 last.
GBP Rallies in Better Data
GBPUSD has been higher today with price rallying to 1.2931 last on the back of stronger than expected UK data this morning. UK GDP was seen rising 0.3% over last month, beating expectations of a 0.2% reading and marking a firm recovery from the prior month’s -0.3% reading.
Risk Markets Soften Following Earlier Rally
Risk assets have softened a little over the European morning though remain supported on the back of yesterday’s rally. A stronger than expected Chinese CPI reading has helped lift risk sentiment some, though uncertainty over the ongoing coronavirus is limiting gains. The SPX500 is now retesting the 3358.86 level, which is holding as support for now.
Mixed Day For JPY & Gold
Safe havens have had a mixed start to the day on Tuesday with the Japanese Yen rising against USD while gold falls back. Yesterday’s rally in equities has seen a weaker flow of safe-haven buying, despite the ongoing risks from coronavirus. USDJPY trades 109.85 last, with price sitting just off the week’s 110 highs. XAUUSD trades 1569.35 last, as price continues to recover off the 1555.38 level support.
Crude Rallying Again
Oil prices are rallying so far today with crude benefiting from slightly better risk appetite over the last 24 hours. If equities prices can find their feet again today and continue the rally, crude is likely to recover further. Later today, the API crude report will be the key data focus ahead of tomorrow’s EIA release. Crude trades 50.48 last.
Loonie Capped By 1.33
USDCAD has been a little firmer today though price remains back below the 1.33 level, having broken above the level earlier in the week before reversing. The rally in crude prices has helped CAD recover over recent sessions, though broad USD strength has stemmed the declines. USDCAD trades 1.3297 last.
Aussie Holding Above .6709
AUDUSD has been a little lower today also, correcting in line with this morning’s weakness in risk markets. However, if equities can start to rally again today, AUD could continue to build above the .6682 level support. AUDUSD trades .6709 last.