Forex Today: DXY extends gains, Aussie weakest in Asia, US Q3 GDP eyed

Dhwani Mehta FXStreet

Broad-based US dollar strength extended into Asia, with the USD index clinching fresh 3-month tops near 94.80 levels, leaving most majors pressured in the red zone. The Aussie was the biggest loser, with losses accelerated on the Australian political headlines, while the NZD/USD pair held steady, having derived some respite from the oversold technical indicators. The Yen also lost ground vs. the greenback on Fed/ BOJ monetary policy divergence.

Among other related markets, gold and oil prices traded on the back foot, while the Asian equities traded mixed, with the Nikkei rallying +1.10% on Wall Street optimism and weaker Yen.

Main topics in Asia

Australia Producer Price Index (QoQ) below forecasts (0.4%) in 3Q: Actual (0.2%)

Fed Chair Contender Taylor: Disappointing US growth since recession is due to economic policies pursued

More comments crossing the wires from the Fed Chair contender John Taylor, via Bloomberg, as speaks at the University of Wisconsin.

China’s industrial profits jump to fresh 6-year highs in September

According to the latest data released by China’s National Bureau of Statistics (NBS) on Friday, the country’s industrial profits extended its surge into a second straight month in Sept, hitting the strongest levels in six years.

Australia PM Turnbull loses majority after court citizenship ruling - Bloomberg

Australia PM Turnbull government has lost its majority after the high court ruled that Deputy PM Barnaby Joyce is ineligible to remain in parliament as he was also a citizen of New Zealand when elected.

Key Focus ahead

Looking ahead, we could see a phase of consolidation across the fx board, as the dust settles over the ECB’s dovish taper aftermath. The EUR/USD pair meanders near July lows ahead of the German import prices data, as attention now turns towards the US Q3 advance GDP report and revised UoM sentiment for the next move in the US dollar.

EUR/USD: A dead cat bounce ahead of US Q3 GDP?

The EUR/USD pair accelerated its overnight sharp declines and went on to hit the lowest levels since July at 1.1625 in Asia, as the USD rally gained further traction heading into the US Q3 GDP release due later today.

GBP/USD - Widening of US-UK Yield differential to trigger a bearish breakdown?

GBP/USD failed to capitalize on the Wednesday's bullish outside day candle yesterday as the bond yield differential turned a blind eye towards upbeat UK GDP reading and continued to rise in the GBP-negative manner.

Q3 GDP, advance estimate preview - Nomura

"In the advance estimate of Q3 real GDP, we expect the BEA to report growth of 2.9% q-o-q saar (Consensus: 2.6%).”

Expecting a markup of the House's tax proposal next week - Nomura

Analysts at Nomura explained that now that the House has adopted the Senate’s Budget Resolution for FY 2018…

BOJ to maintain its status-quo next week - BAML

Analysts at Bank of America Merrill Lynch (BAML) offer a sneak peek at what to expect from next week’s Bank of Japan (BOJ) monetary policy decision…

GMT	Event	Consensus	Previous
Friday, Oct 27
06:00	EUR Import Price Index (YoY)	2.6%	2.1%
06:00	EUR Import Price Index (MoM)	0.4%	0.0%
07:15	EUR ECB's Praet Speech
12:30	USD Gross Domestic Product Price Index	1.8%	1.0%
12:30	USD Gross Domestic Product Annualized	2.5%	3.1%
12:30	USD Personal Consumption Expenditures Prices (QoQ)	1.2%	0.3%
12:30	USD Core Personal Consumption Expenditures (QoQ)	1.3%	0.9%
14:00	USD Michigan Consumer Sentiment Index	100.9	101.1
17:00	USD Baker Hughes US Oil Rig Count		736
19:30	USD CFTC Oil NC net positions		429.5K
19:30	USD CFTC Gold NC net positions		$200.7K
19:30	USD CFTC USD NC net positions		$161.9K
19:30	GBP CFTC GBP NC net positions		£5K
19:30	EUR CFTC EUR NC net positions		€90.5K
19:30	AUD CFTC AUD NC net positions		$61.8K
Sunday, Oct 29
24h	GBP Daylight Saving Time Ends
24h	EUR Daylight Saving Time Ends
Monday, Oct 30
07:00	EUR Retail Sales (MoM)		-0.4%
07:00	EUR Retail Sales (YoY)	2.9%	2.8%
07:00	GBP Nationwide Housing Prices s.a (MoM)		0.2%
07:00	GBP Nationwide Housing Prices n.s.a (YoY)		2%
09:30	GBP Consumer Credit		£1.583B
09:30	GBP Mortgage Approvals		66.58K
09:30	GBP M4 Money Supply (MoM)		0.9%
09:30	GBP M4 Money Supply (YoY)		4.4%

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.