Forex today: Improvement in China’s data boosts the antipodes and risk appetite

It was a risk-on ending to last week's trade following an improvement in China’s data sending yields on the rise and equities up while the greenback climbed back towards the 97 handle in the DXY having lost its footing in the prior sessions.

Ross J Burland FXStreet

FX traded within familiar ranges. The euro was trading to a two-week high through 1.1320, ending North America a touch below 1.13 the figure. The great British pound was lively throughout the sessions but ended New York on the back foot hitting a low of 1.3064 falling from the 1.3130s in early trade. USD/JPY was making a base on the 112 as risk appetite drove back the yen from the 111.70s. As for yields, the US 10-yr note was up 6.8bps to 2.565%. Stock markets were encouraged by the growth and policy backdrop with the S&P 500 up 0.7%.

U.S. data

U.S. import prices climbed 0.6% m/m in March (from 1.0% m/m in the month prior), while export prices also rose by 0.7% m/m.
The University of Michigan’s preliminary sentiment index fell to 96.9 for April (from 98.4 in the month prior).
5-10 year inflation expectations also fell in April, to 2.3% from 2.5% in March while 1-year expectations also dipped slightly, arriving at 2.4% - (Firming a neutral bias at the Fed).

Antipodes get a boost from China

Risk appetite was a key driver for the Aussie and kiwi at the end of the week following China’s monetary data which was better than expected in March as the stimulatory measure are flowing into lending and credit metrics, as noted by analysts at ANZ Bank:

"New Yuan Loans rose to Y1690bn (against an estimate of Y1250bn), while Aggregate Financing was up Y2860bn (beating expectations of Y1850bn). M2 money growth rose to 8.6% (from 8.0% in the month prior), while March exports were up 14.2% y/y after falling by 20.8% in the month prior. The improvements in credit data mitigated some of the anxiety around China’s 7.6% y/y drop in imports for March."

While we now await China’s retail sales and GDP this week, AUD/USD made a one-month high into the 0.7190s, ending the New York session a in the 0.7170s while the Kiwi moved up to the 0.6780s ending the sessions 20 pips lower as traders look ahead to this week's NZ CPI.

Key notes from Friday and the weekend

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD remains offered near 1.3470

GBP/USD adds to the multi-day negative streak and retreats toward the 1.3470 zone on Wednesday, or four-week troughs. Cable’s deep correction comes on the back of the unabated recovery in the Greenback and the persistent geopolitical concerns.

EUR/USD bounces off lows; still below 1.1600 post-ADP

EUR/USD now manages to pick up some pace and revisits the 1.1580 region on Wednesday. That said, the pair rebounds from earlier two-week lows following some loss of momentum in the US Dollar soon after the ADP report came in short of expectations in August.

Gold treads water above $4,300

Following an earlier pullback to the $4,280 region per troy ounce, Gold prices now regain some composure and reclaim the $4,300 mark, advancing modestly for the day and setting aside three consecutive days of losses. The precious metal’s lacklustre rebound comes amid modest gains in the US Dollar, steady geopolitical uncertainty and mixed US Treasury yields.

WTI advances to mid-$90.00s, fresh high since July 24 amid escalating US-Iran tensions

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since July 24 during the Asian session on Wednesday.

Crypto Today: Bitcoin, Ethereum, XRP edge lower as renewed US-Iran tensions weigh

The cryptocurrency market is pulling back broadly on Wednesday as investors adopt a cautious stance, with Bitcoin consolidating near its short-term support at $77,000. Ethereum remains under pressure, slipping toward $2,400. Ripple is also trending lower.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.