Forex Today: Boris on the brink of a Brexit deal, trade concerns reemerge, US Retail Sales eyed

Yohay Elam FXStreet

Here is what you need to know on Wednesday, October 16:

Brexit negotiations: The UK and the EU seem close to a deal that includes an open border on the island of Ireland and a customs border in the Irish Sea. Some dub the accord as "Theresa May's deal with lipstick" – implying significant concessions from UK Prime Minister Boris Johnson. The Northern Irish Democratic Unionist Party (DUP(has concerns while hardline Brexiteers seem to be on board. Talks in Brussels continue with Chief EU Negotiator Michel Barnier to brief diplomats on progress around 12:00 GMT. Late in the day, the PM will brief his Conservative Party. The aim is to declare a deal in the EU Summit on Thursday. GBP/USD has dropped from the highs near 1.28. More: Brexit: Five outcomes and GBP/USD reactions as a deal may become real
Hopes for an accord have impacted the market sentiment beyond the pound and the UK. The yen reached multi-month lows, EUR/USD advanced, and gold came under pressure.
Trade: China has demanded that the US remove US tariffs and say that otherwise, it cannot reach the target of buying $50 billion worth of agricultural goods. Moreover, the world's second-largest economy is unhappy with the intention of American lawmakers to support protesters in Hong Kong. USD/JPY that was carried higher amid Brexit hopes has retreated.
US Retail Sales for September stand out on the economic calendar. Moderate increases in all measures are expected, confirming the strength of the American consumer. See US Retail Sales Preview: Stronger consumer sentiment may tilt consumption higher
UK Consumer Price Index is set to rise, final euro-zone CPI to be confirmed at low levels, and Canadian inflation to drop on a monthly level. Mark Carney, Governor of the Bank of England, will participate at a panel discussion and will likely refrain talking about Brexit. Jens Weidmann, President of the German Bundesbank, may continue criticizing the decision to restart the European Central Bank's bond-buying scheme.
The Federal Reserve publishes its Beige Book later today. Alongside speeches from several Fed officials, markets will try to gauge if the bank will cut rates later this month.
Cryptocurrencies have been consolidating losses suffered on Tuesday.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD stabilizes above two-week low/0.6950 as traders await US election results

AUD/USD edges higher in the Asian session on Wednesday, recovering slightly from a two-week low touched on a less hawkish RBA reaction the previous day. Hopes for Iran diplomacy undermine the safe-haven US Dollar and support the currency pair, though the upside remains capped as traders await US midterm election results.

USD/JPY retreats from three-week top, slips below 158.50 amid intervention risks and softer USD

USD/JPY slides below 158.50 in the Asian session on Wednesday, snapping a two-day winning streak to hit a near three-week high the previous day, as intervention risks support the Japanese Yen. Meanwhile, the US Dollar remains on the back foot amid hopes for Iran diplomacy, further weighing on the currency pair as traders brace for some volatility surrounding US midterm election results.

Gold consolidates below $3,950 as Fed hike bets counter softer USD ahead of US election results

Gold struggles to capitalize on the previous day's bounce from sub-$3,900 levels, oscillating in a range during the Asian session on Wednesday as traders brace for short-term market volatility surrounding US midterm election results. Meanwhile, hopes for Iran diplomacy weigh on the safe-haven US Dollar and support bullion, though upside remains capped amid Fed rate hike bets.

Ethereum: US-led selling keeps ETH below $2,309 realized price

Ethereum (ETH) faces pressure near $2,300 on Tuesday as it struggles to recover its realized price. The top altcoin fell below its realized price, or investors' average on-chain cost basis, at $2,309 following the $6.3 billion Binance hack last Thursday.

US Midterms: Can Wall Street rally despite AI debt and credit risks?

Political uncertainty may be coming to an end, but the real question for investors is whether the technology sector can sustain its enormous spending commitments. The US midterm elections are arriving at an interesting moment for financial markets.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.