Forex Today: Fewer catalysts portrayed soft start to the week but GBP, CAD and CHF moved

  • Lack of catalysts offered lesser Forex moves while risk assets and CAD were on the downside while GBP held positive.
  • RBA meeting minutes to try offering an active start ahead of fewer catalysts from the Eurozone and the US.

Monday couldn’t be an eventful day for the Forex traders as fewer headlines and no data, not to forget Easter holidays at the UK, confined market moves. Asian session followed Friday’s hints of risk-on and upbeat China data but the charm dimmed while going forward and turned almost negative by the end of the US session. The reasons being, comments from the US Treasury secretary Steve Mnuchin, Fed’s Evans and results from Goldman Sachs and Citigroup.

Looking in detail, the GBP, the CAD and the CHF were movers of the day. The British Pound (GBP) benefited the most as traders welcomed the British lawmakers’ ability to spread chatter of avoiding no-deal Brexit despite being on Easter vacations till April 23. The Canadian Dollar (CAD), on the other hand, was on the losing side as Bank of Canada’s (BOC) quarterly business survey report portrayed gloomy outlook for the first quarter of the year. Moving on, the Swiss Franc (CHF) was on the downside as overall market sentiment was against the safe-havens which could also be witnessed from the moves of Gold and Japanese Yen (JPY).

The US Treasury Secretary Steve Mnuchin said that there is a lot to work to do yet with China while ANZ reported that China considers reshuffling some of its tariffs off agricultural goods in order to take some pressure off US farmers. Federal Reserve Bank of Chicago President Charles Evans reaffirmed the Federal Reserve’s neutral policy stance but couldn’t avoid saying that the US inflation was weaker than expected off-late. Elsewhere, the EU's Trade Commissioner Cecilia Malmstrom showed the region’s readiness to discuss trade with the US on condition of no more tariffs.

Global markets were mostly unchanged but in red as numbers from Goldman Sachs and Citigroup couldn’t stretch previous optimism spread through JP Morgan results.  The Dow Jones Industrial Average, the Nasdaq Composite and S&P500 all lost around 0.1%. Better than expected earnings from Goldman Sachs couldn’t please buyers as a 18% drop in sales from institutional clients´ division dragged the revenues. Further, Citigroup also registered a decline in revenue amid upbeat earnings.

It should also be noted that the US NY Empire State manufacturing index for April beat 6.0 market consensus to rise 10.1 against 3.7 prior. However, details showed that the business conditions dropped to the lowest in more than three years.

Risk barometer, the 10-year US treasury yield, remained little changed around 2.56%.

Looking forward, RBA meeting minutes will start heating the economic calendar during Asian session whereas the UK employment figures and the Eurozone ZEW economic sentiment numbers will be on watch in European trading hours and the US industrial production could gain attention at the day-end. Additionally, headlines on trade between the US and the EU and/or the US and China could join Brexit news reports could offer intermediate moves.

Key Notes:

Wall Street ends in the red in a soft start to the week

GBP/USD consolidates daily gains, hovering around 1.3100

USD/CAD jumps to daily highs near 1.34 after BoC's dismal Business Outlook Survey

USD/CHF tests monthly highs near 1.0050

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