Dollar Down On Data Miss
The US dollar has been higher over the European morning on Wednesday, recovering losses seen in reaction to yesterday’s weak ISM manufacturing print. The index remained in contractionary territory for a second consecutive month over September, highlighting the ongoing damage from the US/China trade war. USD index trades 99.00 last, off yesterday’s 99.31 highs.
CPI Weakness Hits EUR
EURUSD has been lower over the day so far, weighed on by a resurgent US dollar. CPI data for the Eurozone, released yesterday, showed inflation undershooting expectations once again. On the back of a set of weak Eurozone PMIs last, this latest data miss keeps sentiment firmly bearish on EURUSD which is holding just above the 1.0914 level for now.
UK Traders Wait Brexit Deal News
GBPUSD has been back under pressure again today. Boris Johnson will today present an amended Brexit deal to the EU in the hopes of securing approval for a deal ahead of the October 19th Benn Bill deadline. For now, it seems that the market is skeptical as to the likelihood of Johnson’s deal being approved. GBPUSD trades 1.2243 last, remaining back below the 1.2382 level.
Risk Down on Global Growth Fears
Risk assets have been firmly lower today on the back of yesterday’s weak US Manufacturing data. The market is now waiting on tomorrow’s Non-Manufacturing data, ahead of the US employment reports on Friday. SPX500 trades 2919.63 last with price having broken back below the 2931.22 level.
Safe Haven Inflows Rise
Safe havens have had a better start today with both gold and the JPY higher against USD in light of the sell-off in equities. USDJPY trades 107.64 last with price potentially creating a lower high against the September highs, signaling further downside. XAUUSD trades 1483.79 last, still way down from the key 1522.75 level for now.
Crude Down Despite Inventories Draw
Oil prices remain lower today ahead of the headline weekly-EIA report due later today. The downside is likely linked to the weakness in US manufacturing given that the API yesterday reported a 6 million barrel drawdown in US crude stores. If the EIA confirms the data later, this could help stem the decline. Though for now, focus is on slower global conditions. Crude trades 53.74 last.
CAD Capped Again
USDCAD has rallied firmly off the 1.3207 level tested yesterday. The sharply lower US manufacturing reading put a dent in USD though weaker oil prices have weighed CAD down, allowing for a recovery in USDCAD. Trade balance data due on Friday will be the key domestic data release of the week for CAD traders.
Fresh 2019 Lows in Aussie
AUDUSD traded down to fresh 2019 lows today as the post-RBA sell-off continues. The RBA cut rates this week to fresh record lows of just .75% and left the door open for further cuts given the ongoing damage being suffered as a result of the US/China trade war as well as persistent domestic headwinds from low wages and high household debt. AUDUSD trades .6677 last, sitting right on 2019 lows as of writing.