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Dean's Daily FX Update – 04 August 2017
In the Zone
- EURUSD
- USDZAR
- ALSI
- Oil
Noteworthy News
- Keep an eye on what looks like a trade war between the US and China starting to develop.
Recap
The market eagerly waited on the BOE statement yesterday, except for a few brave souls the market was largely expecting the vote to remain on hold – which it did. I mentioned in this report yesterday that I have a gut feel that central banks would start back tracking on their recent hawkish comments and this was possibly the start of that, there was a decline in forecasts and Carney admitted that the high inflation was because of the pound – essentially that it was transitory.
The GBPUSD immediately traded lower, it moved from 1.3150 to 1.3210 before settling at 1.3210 for the evening, the consolidation here has not really bounced much from here which should be concerning. The market will start to dry up ahead of the NFP read and it could be the catalyst for a further mover lower this afternoon.
Amongst all the drama in the other major pairs, the commodity pairs quietly went about their business in a very methodical nature. The USDCAD falling to 1.2550, the AUDUSD trading higher to 0.7950 and the NZDUSD rebounding off major support to trade to as high as 0.7450. I am using these small rallies against the greenback to look for secondary entries in what I believe is a trend starting to turn.
Keep an eye on US politics today also, ex-FBI director Mueller has set up a grand jury for the investigation into the Russian probe – we also seeing media are continuing to turn the screw on Trump. I still get the feeling that the media are starting to make Trump more popular as it starting to look like a witch hunt.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
14:30 CAD Employment Change
Consensus: 13.1K
Effect: Actual higher than expected is good for the CAD
14:30 CAD Trade Balance
Consensus: -1.3B
Effect: Actual higher than expected is good for the CAD
14:30 CAD Unemployment Rate
Consensus: 6.5%
Effect: Actual lower than expected is good for the CAD
14:30 USD Average Hourly Earnings
Consensus: 0.3%
Effect: Actual higher than expected is good for the USD
14:30 USD Non-Farm Employment
Consensus: 182K
Effect: Actual higher than expected is good for the USD
14:30 USD Unemployment Rate
Consensus: 4.3%
Effect: Actual lower than expected is good for the USD
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