15/ 10/ 2019

Brexit & Stats Keeps the EUR & GBP in the Forefront

The forex markets are staying in tight range in Asian session today. More clarity is needed regarding two of the biggest global risks, before traders commit more. It’s unlikely for a Brexit deal to be reached at the EU summit this week. And it’s reported that EU could hold a new emergency summit before end of the month. Yet, that would very much depend on any progress made. Meanwhile, it would take more time for US and China to hammer out what were exactly agreed in texts. Before that, nothing is considered done, not even phase 1 of a trade deal.

Dollar’s recovery overnight was relatively short lived and weak. Sterling is staying in consolidations after the spike last week. Such consolidations could enter for a while, until there is more news on Brexit coming through.

It’s a busy day ahead for the EUR and the GBP, with Brexit chatter and economic data to provide direction.

14/ 10/ 2019

Week Ahead | Investor’s Eyes on European Council Summit of Brexit

Global markets were boosted strongly last week as there seemed to be resolution to two major risks finally. UK and Ireland appeared to have found the “pathway” to avoid no-deal Brexit. Meanwhile, US and China agreed an interim trade deal that would avert further tariffs escalation. In the currency markets, Sterling was overwhelmingly the strongest one on Brexit optimism. Canadian Dollar was the second strongest, lifted by strong employment data. Euro was the third strongest. On the other hand, Yen and Swiss Franc were the weakest, naturally on strong risk appetite and rebound in treasury yields. Dollar also suffered some selloff and ended as the third weakest.

The Dollar found strong support early, as the markets considered the implications on existing tariffs on the economic outlook. It is a big week ahead, with corporate earnings, trade talks, Brexit and economic data in focus. There’s also the IFM meetings and the EU Summit.

10/ 10/ 2019

FX Markets Remained Cautious as US-China Trade Talks Resume

Overall, the forex markets remain generally quiet in very tight range. It was back in the green for the majors on Wednesday, the trade war weighs once more swung in favor of the global equity markets. News of China being open to an agreement on the basis that no further tariffs are introduced provided support on the day.

It’s a relatively quiet day ahead on the Eurozone economic calendar. German trade data for August is due out ahead of the European open. Following a mixed set of stats earlier in the week, we can expect the figures to influence going into the open.

On the geopolitical risk front, news of China being supportive of a trade agreement failed to spur demand for riskier assets. Trade tensions have been on the rise and China’s support of an agreement comes with a limitation that no further tariffs are introduced. With talks set to resume later today, some caution was to be expected.

09/ 10/ 2019

A Light Economic Calendar Leaves Geopolitics and U.S – China trade talks in Focus

The dollar steadied earlier today as hopes for a breakthrough in U.S-China trade talks waned, sending investors into less risky assets, the U.S. imposition of visa restrictions on Chinese officials, and the blacklisting of Chinese firms, over the treatment of Muslim minorities have cast a pall over trade discussions scheduled in Washington for the rest of the week. The resulting risk aversion had bolstered the dollar overnight, which is seen as a safe-haven owing to its position as a global reserve currency. While the pound wallowed near a month low on deepening uncertainty over Brexit. 

In a telephone call on Tuesday, German Chancellor Angela Merkel told British Prime Minister Boris Johnson that a deal was “overwhelmingly unlikely,” a Downing Street source said.

Looking ahead, a light economic calendar leaves geopolitics and U.S – China trade talks in focus in particular. Expect negative news to weigh heavily on risk sentiment.