- Forex today was mixed, with weakness in the CNH sending a flight to the greenback which weighed on the EM-FX and high-beta currencies.
The Chinese stimulus is a two-sided coin, one one hand it can be seen as a desperate measure, on the other, a relief near-term for investors which had helped risk sentiment and FX along, supporting the antipodeans and high beta FX. However, the relationship between the US and China is fragile and reports that federal prosecutors have launched a criminal investigation into China’s Huawei Technologies Co. for allegedly stealing trade secrets from American corporations that it does business with is concerning.
Meanwhile, rates were slightly higher in US Treasuries following healthy jobless claims and Philadelphia Fed numbers which were a supporting factor for the greenback, weighing on the euro which fell on a dovish ECB outlook.
Currency action
EUR/USD dropped to 1.1369, piercing the 50-D SMA located at 1.1386 with 1.1350 sighted as a key support level that if breached opens prolonged risks to the downside as markets await the ECB next week. Cable was popping higher again, albeit there are limited prospects for higher until a breakthrough in a hung UK parliament is achieved while Brexit remains very much up in the air. GBP/USD climbed 1.2975 within a New York range of between 1.2975-1.2883. USD/JPY was supported by strong US data and higher yields aided slightly by a hawkish Fed Quarles and an ambiguously strong GBP/JPY cross. USD/JPY climbed from 108.68 to a high of 109.40, ending NY at 109.24. AUD/USD surged on news that the Whitehouse is considering lifting tariffs noise - Treasury Sec. Mnuchin is in favour of lifting the tariffs, while trade representative Lighthizer is not. However, the fact that the US is investigating Chinese tech giant Huawei for stealing trade secrets from US business partners should be a weight on trade truce prospects. AUD/USD was bid from 0.7151 to a high of 0.7221 where it was quickly faded for a NY close of 0.7192.
Key notes from US session
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.