The Japanese yen and Swiss franc remained the favoured currencies today and it is interesting to note that USD/JPY made little effort to reclaim the 105 handle after effortlessly breaking beneath it yesterday. And with the first steps of a trade war now in place, we await the reaction from European and US trading floors.
With the bearish trend remaining far from challenged on the US dollar index (DXY), we note that volatility is showing signs of picking up. And with Trump due to announce fresh tariffs later today we’re on the lookout for the next round of range expansion.
USD/CAD uptrend has paused at key structural levels. With ongoing trade issues, the FOMC and key Canadian data looming large, we take a technical look at this major.
Through the first three weeks of the month, the British pound has been the strongest major currency, boosted by a yesterday’s breakthrough in the negotiations around a Brexit transition deal.
Friday's break above 1.80 takes GBP/AUD to its' highest level since the days following Brexit. With UK CPI and BoE's meeting making up just some of the data flow specific to GBP/AUD, the potential for volatility to remain could be high.
It’s been another turbulent week in the FX space with potential trade wars, moves in the Canadian dollar and Japanese yen accounting towards the bulk of the hype. But if you missed the moves, focus on where volatility may spring next. And one such pair we’re closely watching for this very reason is EUR/CHF.
Friday’s jobs report showed a disappointing 0.1% m/m (2.6% y/y) increase in average hourly earnings, and that slowdown in price pressures was also seen in the US CPI report earlier this week, which printed at just 0.2% m/m. So far at least, it’s looking like January’s data was yet another “false dawn” for price pressures.
In the same way it can take a long time to turn a large ship, the same can be said for a change of long-term trend. And if clues on the AUD/JPY weekly chart are anything to go by, we may need to hold into our hats as bearish momentum has been picking up after a multi-month turnaround.
Wise-cracking Phil Hammond delivered his Spring Statement with a more optimistic outlook on the economy noting that there is “a light at the end of the tunnel” for the UK’s finances, though Brexit …
With the rate at which Canadian Dollars have been thrown overboard recently, you’d be forgiven for thinking they were on fire. As for JPY, the annual repatriation of the Yen and bouts of risk-off have helped it remain the strongest major this year. Place these two contrasting themes together and what you’re left with is the CAD/JPY chart.