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Dean's Daily FX Update – 03 October 2017
In the Zone
- GBPUSD
- USDCAD
- USDJPY
- USDZAR
Noteworthy News
- Scenes during the Catalonia elections yesterday were terrible, there are 844 confirmed injured thus far. This really does cast a shadow over the Spanish government and will give the EU a major test.
Recap
The US was left stunned again as we witnessed another horrific mass shooting in Las Vegas that has left close to 60 people dead and more than 500 injured. President Trump has had to deal with some pretty devastating news in his first year in office if you consider these shootings, North Korea conflict and also the devastating hurricane season. There are many that are going to use the opportunity to criticize him which will obviously have some effect on the dollar.
The market seemed to ignore developments in Las Vegas though, choosing to rather focus on the impending tax reform, and the dollar seemed to strap in for the ride. Month end flows did slow the momentum a little bit on the New York open, but it didn’t take long for the dollar run to continue.
The big news came in the GBPUSD as softer manufacturing data combined with dollar strength meant some unrelenting selling in the pair. It fell by over 125 pips and was the weakest day for 3 months, I will be watching 1.3200 with some keen interest this morning as I suspect that buyers may start building bids there.
Similarly, the EURUSD attempted to break through 1.1750 on a couple of occasions yesterday but failed each time. This level becomes the next resistance level, as the week moves on I suspect that the buyers will start getting interest. Bids at 1.1730 did hold, but I suspect that something closer to 1.1700 will be a more attractive entry level.
The market did move yesterday on low volatility which means that yesterday may just have been a washout day – I will start looking for moves either today or Wednesday.
Important Economic Data out today
10:30 GBP Construction PMI
Consensus: 51.1
Effect: Actual higher than expected is good for the GBP
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