Market Drivers August 28, 2018
EU Money Supply misses
UK back at work
Nikkei 0.06% Dax 0.08%
Europe and Asia:
EUR EU Money Supply 4.0% vs. 4.3%
USD Consumer Confidence 10:00
It’s been another quiet night of trade in FX as summer doldrums and lack of any fresh news kept majors in check for most of Asian and early European trade.
The dollar remained weaker as both EURUSD and GBPUSD reached for the big figures with euro touching the 1.1700 and cable tapping the 1.2900 barrier. The weakness in the buck was the result of relief risk-on flows after US completed a trade deal with Mexico indicating that the Trump Administration will be willing to negotiate with Canada and Europe as well.
The loonie remained the biggest mover of the night with USDCAD testing 1.2950 support as expectations ran high that US and Canada would come to terms and that some form of NAFTA would be resurrected in the North American market allowing for relatively friction free trade in the region.
With no major eco news on the docket, trade headlines will continue to dominate flows with all attention now focused on Canada as negotiations turn northward. Generally Canadian authorities are optimistic that a deal can be reached and positive news on that front could send USDCAD below 1.2900 as the day proceeds.
As to EURUSD and GBPUSD, the relief rally has put in a big bounce already and both pairs have serious resistance at 1.1750 and 1.2950 respectively, but given the change of sentiment both on the trade front as well as US rate hike policy projections the anti-dollar move may have enough momentum to smash through those levels as the week proceeds.