- US dollar is sent lower by 0.2% in the DXY while WTI rallies.
- WTI rallies to a two-year high on optimism over OPEC and Saudi purge headlines.
- EUR/USD pops and weighs on the DXY while US rates in the medium term and 10-year benchmark slide 0.2%.
Forex today saw a sell-off in the dollar while the price of oil took off through the roof to two-year highs.
The Saudi Crown Prince Mohammed bin Salman’s purge over the weekend seemed to weigh on sentiment as traders ponder as to how this might affect global assets considering the tentacles that a number of the people involved have and ho far they reach. The euro took the DXY down as the NY session got going, despite the concerns over the banking sector that was under pressure overnight in the European shift.
In the US, the US 10yr treasury yields fell from 2.34% to 2.32% and that was making for a two-week low while the Fed fund futures yields continued to price the chance of a December rate hike at 97%. The US dollar index is down 0.2%.
Back to the euro, while there was a slight rally of 30 pips, the H&S neckline remains a key dominating factor and keeps a lid on rallies. Subsequently, the single currency ranged between 1.1580 and 1.1620. Cable was better bid up to the hourly 100/200 sma crossover at 1.3174 while the cross taking a look in at the 0.88 the figure, with a low of 0.8810. USD/JPY was still struggling against 114.50 after a new 7 -month high was scored in Asia at 114.73. 113.74 was low where the pair looked to close.
As for the antipodeans, they were performing on the back of a weaker dollar. The Aussie jumped to 0.7689 from 0.7649 while the Kiwi rallied to 0.6938 from 0.6882. The USD/CAD's double top waved off the bulls down to 1.2713 with a strong performance in WTI to $57.76 high, up over 3%. Gold was up to $1,280 from $1,269 lows. Iron ore pulled up copper along with it, also supportive for the Aussie.
Key events in Asia:
The RBA policy decision is expected to be on hold, as explained by analysts at Westpac who explained that the key aspects of the statement will be on the subdued retail spending partial despite ongoing job gains, a cooling housing market and the inflation outlook. "Clear guidance will be provided in the SoMP and associated forecasts on Friday."
Key notes:
- Fitch: Tax proposal may add fiscal strain to US public finance
- Nigeria supports an extension of a deal between OPEC, Russia and other non-members
- Fed's Williams: Optimal to have decision on best rate-setting framework before next recession
- Fed's Dudley: Could need to go slightly above 2% to keep inflation anchored
- US Commerce Sec. Ross: US wants to be UK’s ‘number one trading partner worldwide’
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