USD Hit By Further Data Miss
The US dollar has been lower across the European morning on Friday on the back of further data weakness yesterday. IHS manufacturing reading for October did come in better than expected. However, the durable goods number was far worse than expected at -1.1% on the month. Continued data weakness is boosting market expectations of a Fed rate cut next week keeping USD pressured. The USD index trades 97.37 last.
EUR Lower On ECB
EURUSD has been a little higher today on the back of USD weakness though is only recovering the losses seen yesterday in response to the October ECB meeting. The meeting, which has the last for Draghi, saw the bank keeping the prospect of further easing alive. This is given the persistent weakness in the European economy. EURUSD trades 1.1117 last, back below.
GBP Soft Ahead of EU Decision
GBPUSD has been weaker across the European morning today. The EU has yet to grant the UK its Brexit extension request. This means that the UK could still crash out of the EU without a deal on October 31st. However, in line with recent recommendations from EC president Donal Dusk, the EU is likely to grant the request which should help lift GBP again. GBPUSD trades 1.2835 last.
Risk Pauses Into Weekend
Risk assets have been a little subdued on the final day of the trading week, though, the SPX500 remains supported near highs. With the Fed expected to cut rates next week, the outlook remains bullish for equities. Furthermore, with the US and China on course to do a deal and Brexit looking like it will be delayed again, the risk environment is encouraging.
JPY & Gold Firmer Over USD
Safe havens have both been higher against USD today given the weakness we have seen in the greenback. It seems that traders are covering riskier positions heading into the weekend with both JPY and gold firmer. USDJPY trades 108.63 last while XAUUSD trades 1504.78.
Crude Lifts Higher
Oil prices have risen firmly over the week and are currently trading in the green so far today. This week, the EIA reported an unexpected drawdown in US crude stores as a result of a sharp drop in US crude imports. The data has helped offset some of the downside pressure in oil along with optimism over ongoing US/China trade negotiations.
CAD Climbs On Oil Comeback
USDCAD continues to push lower today marking a week of losses as rising oil prices and increased Fed rate cut expectations are allowing CAD to recover. The potential for a US/China trade deal is also helping lift CAD which would benefit from the increase in commodity prices as trade recovers. USDCAD trades 1.3061 last having now broken below the 1.3068 support.
Aussie Down But Not Out
AUDUSD trades a little higher today also, taking advantage of the weaker USD, though finishes the week lower as of writing. AUD is very much tied to the ongoing US/China trade talks. Therefore, if we see positive headlines on the back of today’s meetings between US/Chinese officials this should help AUD at the start of next week. AUDUSD trades .6823 last, sitting off the .6850 level for now.