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Market Insight Commentary – Forex
Today's News Headlines
- The US Senate is to introduce a bipartisan bill today that would delay the auto mobile tariffs – there is no telling how this will affect Donald Trump.
Market Insight Commentary – Indices
Market Recap
The day was dominated by discussions between Trump and Junker of the EU and the hot topic surrounded the possibility of a deal with regards to these ridiculous tariffs. The speculation later become reports that a deal had in fact been struck with headlines stating that the EU had agreed to buy more soybeans from the US and Trump to cease new tariffs on EU automobiles. This news sent most currencies to session highs against the US dollar as well as US Indices to within a whisker of all-time highs.
They say the devil is often in the detail and I have a hunch that this may be the case with this agreement, if I look into this deal – it would seem as though nothing changes. There is no clause that states that tariffs already placed will be removed and at the same time Junker has not got the authority to state EU member states will buy soybeans – very little of Europe eat soybeans.
The EURUSD climbed at first, but ran into resistance at 1.1712 before trading to 1.1660 during the London session, when news of this report surfaced the pair move back up to resistance at 1.1715. This becomes a key level to watch this morning, keeping in mind that there is and ECB meeting today I am hoping for the EUR to climb a little higher which may present an opportunity to fade the move later this evening.
Lost in yesterday’s reports was the USDCAD which for me was the real story of the day, the loonie benefited greatly from a perfect storm. Trump sent a letter that a NAFTA deal is on the horizon, oil prices were strong and tariff talk subsided. This allowed the pair to trade to 1.3025 yesterday.
Important Economic Data Due Today
13:45 EUR ECB Refinancing Rate
Consensus: 0.00%
Effect: Higher than expected is good for the EUR
14:30 EUR ECB Press Statement
Consensus: None
Effect: More hawkish than expected is good for the EUR
14:30 USD Core Durable Goods
Consensus: 0.5%
Effect: Higher than expected is good for the USD
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