Forex today: dollar bulls nowhere to be seen, Aussie/CAD and Kiwi steal the show

• Forex today was seeing further appreciation in the high betas and antipodeans while the CNH motored on leaving the greenback out to dry off.
• The mood may switch up as we head towards next week's data calendar where US GDP is on the cards following the key FOMC meeting.

However, for the time being, it seems that we stay with the status quo whereby investors are piling into global equities, despite the elephant in the room which is a prolonged trade war between the US and China. Treasury yields up a couple of basis points and the USD decline. The DJIA was up 0.6% higher into the close, the S&P 500 up 0.1%, and the Nasdaq was bucking the trend, down 0.2%. US Treasury yields were creeping higher with the 10-year yield more positive by 2bps in suit with global yields that were also higher with the UK 10y up by 4bp. WTI rose on the EIA data which underpinned the bullish case for the Canadian dollar.  WTI rose 1.9% to USD71.15/bb and USD/CAD dropped to 1.2899 on NAFTA hopes - briefly spiking, mind you, on reports that the US and Canada are unlikely to reach a NAFTA deal this week. 

Currency action

As for the euro, the pair is oscillating in familiar ranges, with bulls looking for a break through the 1.1725 recent highs and on to 1.1750 before a test of the psychological 1.18 level. The greenback remains heavy but USD/JPY held on the 112 handle which enabled EUR/JPY to underpin the EUR/USD. However, it did give some ground due to a wider DE-US and IT-DE yield spreads. Cable was unable to find any follow through despite the UK CPI surprise data beat, (2.7% vs 2.4% forecasted and 2.5% previous y/y for August ), due to conflicting Brexit headlines. As the day went on, the worse the outlook was for a smooth exit which weighed on the pound. The sticking points stayed with the Irish border. The comments from the UK Treasury minister saying that there could be another referendum if Chequers is rejected by parliament cast a dark shadow over the matter whereby PM May must bring back a feasible proposition from Salzburg - which is very unlikely. Sterling dropped dropped to the 100-hr SMA down at 1.3126 when Ireland PM's, Varadkar confirmed that we are 'no closer to a Brexit deal than in March', and UK PM May followed up by confirming that "this government will never accept a second referendum, " saying that the UK will be leaving EU in March 2019. She also agrees with Barnier that a new proposal for Irish border is needed while the original EU proposal was not going to be acceptable to the UK.  EUR/GBP also bounced on the Brexit headlines and was trading between 0.8861 and 0.8920 as well as within the parameters of 10-D SMA and 100-D SMA on the downside.  USD/JPY was trading in a narrower range, digesting the tariff noise and various geopolitical headlines with no conclusions one way or the other. Risk flows were supported by China saying it won't devalue CNY which enabled Wall Street to continue higher,  as for encouraging investors to keep calm and carry on. Eyes are on a break to 113.18 if the pair can get and hold above 112.38, as being the 76.4% of the July-Aug drop. However, it is yet to be seen if the large and recent rise in US yields can carry on. Shanghai +1.1% was a big contributor to the high betas and antipodeans advance along with the yuan comments. Subsequently, AUD/USD was bid as was copper. Tighter AU-US spreads supported the bull's case for the 0.73 handle but the price only went as high as 0.7274. the pair is now above the 21-D SMA and eyes look to the 55-DMA, daily cloud base & 0.7360/80 levels. The Kiwi started out on the coattails of the Aussie but broke key resistance, albeit in thin liquidity in early Asia when the surprise GDP data arrived, NZD/USD rallied to 0.6652 and stalled there, drifting back into the 0.6640's.

Key events from overnight:

• NZ GDP: Only good news here - TDS

• Wall Street closes mixed as financials lift S&P & Dow while tech weighs on Nasdaq