Flat CPI Weighs on USD
The US dollar has been a little lower over the final European morning of the week. US CPI data released yesterday saw a 0% change month on month at 1.7% on the headline reading.
This, on the back of a dovish set of FOMC minutes, is boosting expectations of an October rate cut. USD index trades 98.28 last, testing the 98.30 support.
EUR Higher on Weak USD
EURUSD has been firmer against USD today in the wake of the continued selloff in the greenback. EUR has been supported over the second half of the week by the release of the ECB meeting minutes which highlighted the extent of the division within the ECB.
This has put the prospect of further ECB easing in doubt. EURUSD trades 1.1017 last, testing the 1.1025 level once again.
GBP Rises on Brexit Deal Hopes
GBPUSD has been firmly higher this morning. Weakness in USD, as well as increased optimism over the prospect of a Brexit deal, is helping boost GBP.
Positive commentary on the back of the meeting between Johnson and Varadkar is keeping hopes of a deal alive. GBPUSD trades 1.2502 last, nearing the 1.2582 September highs.
Risk Rallies On Friday
Risk assets have been firmly higher today also with the market displaying optimism over US/China trade talks heading into the weekend.
The first day of talks concluded with Trump praising the progress made in the talks, adding more hope that an interim trade deal can be done. SPX500 trades 2968.08, pushing above last week’s highs.
Gold & JPY Lower
Safe havens have ended the week lower on Friday as a late-week surge in equities prices has seen diminished safe-haven inflow.
The market remains hopeful that the 13th round of US/China trade talks underway today can produce a deal. If so, this would keep safe havens pressured in the near term.
USDJPY trades 108.14 last. While XAUUSD trades 1496,90, back below the 1500 level.
Crude Surges on Trade Optimism
Oil prices have been higher today also as a result of optimism over the ongoing US/China trade talks. Hopes of a deal are helping offset concerns over the demand outlook in crude which has been weighing on prices recently. Crude trades 54.53 last, sitting well up off the 51. 22 level low. Yesterday, the EIA reported a further build in US crude stores, marking a fourth consecutive weekly rise.
CAD Boosted By Oil Rise
USDCAD has traded lower over the European morning on Friday as the combined backdrop of a weaker USD and stronger oil prices are helping boost CAD.
Positive commentary on the progression of current US/China trade talks is also boosting CAD. USDCAD trades 1.3272 last, sitting back well beneath the 1.33 level.
Aussie Higher on Trade Hopes
AUDUSD has ended the week on a positive note as trade deal optimism boost AUD back to 2-week highs at .6791 last. The potential for a gap higher at the open next week is high given the positive comments made after day one of the trade talks which are continuing today.