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Dean's Daily FX Update – 09 August 2017
In the Zone
- EURUSD
- NZDUSD
- ALSI
- Oil
Noteworthy News
- North Korea threats to Guam were met with stern resistance by the US, conflict is starting to become inevitable and I wonder if the JPY and Gold are starting to price this in – this is something to keep an eye on.
Recap
The move in the dollar reinforced the notion for me that in the void of any drama coming out of the White House, the dollar should be stronger. We touched on the subject yesterday that if Trump was able to keep off that twitter account then I would not be surprised to see the dollar drift lower and then find some real momentum later in August after Jackson Hole.
The JOLTS jobs data is not usually a market mover and perhaps the fact that the market is thin and it is was a big beat played a factor, but the dollar build a head of steam after the data yesterday and the dollar strengthened against all the major currencies.
The EURUSD moved by over a 100 pips, from 1.1815 to 1.1715, the pair closed in the London session which indicates to me that Europeans are ready to take profits on the EUR as soon as anything remotely good comes out. The GBPUSD slipped below 1.3000 and drifted around 1.2950, the slow recover has started in Asia this morning and I would not be surprised if this pair started testing that major psychological level at 1.3000 this morning again.
I will be keeping an eye on the NZDUSD tonight, there is an interest rate decision tonight and I have feeling that the RBNZ are going to try and weaken the currency tonight, 0.7200 becomes the next big level to watch tonight and a close below opens up my original targets of 0.7050 – 0.6950.
On the local front, President Zuma survived yet another no confidence vote. I am seeing a lot of publications that are inferring that this puts Zuma in a stronger as he survived a secret ballet, I actually disagree with this notion. 51 ANC MP’s voted against Zuma and for me this illustrates the party at the moment – broken, and I suspect that the true reflection of the country will be shown in the next election. The reaction of the USDZAR shows what the market feels about Zuma and I break of 13.5000 could signal for the currency to run a little bit.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
16:30 USD Crude Oil Inventories
Consensus: -2.6M
Effect: No consistent effect on the USD
23:00 NZD Monetary Policy Statement
Consensus: None
Effect: More hawkish than expected is good for the NZD
23:00 NZD Official Cash Rate
Consensus: 1.75%
Effect: Actual higher than expected is good for the NZD
23:00 NZD RBNZ Rate Statement
Consensus: None
Effect: More hawkish than expected is good for the NZD
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