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Overview
The USD index remained in the red throughout the European session amid no tier 1 data with many US participants away from market for the Columbus Day holiday. USD/CAD saw strength after the NYMEX pit opened with a selloff in WTI and Brent, which pared some of last week’s 10% gains. This came after Goldman and Barclays reduced their end of year forecasts for oil in 2015 and 2016, in conjunction with OPEC downgrading their demand forecast for 2016. The resulting weakness in oil saw USD/CAD form fresh intraday highs, with volumes lower than normal due to Thanksgiving holiday in Canada. USD/JPY also took a tick lower alongside the weakness in energy, breaking out of a tight range that was held by anticipation of tomorrows BoJ minutes.
AUD continued its recent trend higher, finding strength amid renewed optimism in the metals complex, with base metals trading firmer throughout the session. Gold notably found strength, breaking out of a tight overnight range to reach levels near Black Monday highs, continuing to benefit from the Fed delaying a rate hike.
Elsewhere, CNH saw its best one day performance since March and is at a 2 month high against the USD; this comes as the PBoC gave a stronger fixing in line with recent strength in equities and suggestions that major Chinese lenders were offloading USD in order to push up the exchange rate.
Looking ahead, tomorrow sees the release of: German CPI and ZEW survey, UK CPI, RPI and PPI, Fed Discount Rate Minutes as well as comments from BoE's Vlieghe, McCafferty and Haldane and Fed's Bullard and Dudley. Over in Asia, the most notable events will come in the form of the BoJ minutes release from their September 14-15th meeting and Chinese trade balance data.
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