US/China Trade Deal Signing Today

USD Mixed Following CPI Miss

The US dollar has started the day with a mixed tone. The USD index has now spent the week consolidating just below the recent 97.26 highs. US inflation data released yesterday was a little lackluster with headline inflation rising in line with expectations at 0.2% on the month while core inflation missed at just 0.1% on the month. Looking ahead later we have PPI data as the main US data focus.

EUR Down Again

EURUSD has been weaker today also, though at 1.1124, is up off the weekly lows. ECB meeting minutes are the only key Eurozone print this week, due tomorrow. Traders will be keen to see how much division remains in the ECB following Lagarde taking over as ECB head, as well as how much support there is for further easing.

GBP Lower on CPI Miss

GBPUSD has been lower today. The latest inflation data confirmed a weaker than expected reading in December at 1.3% YOY vs 1.5% expected.  The data adds to expectations that the BOE will look to ease in the coming months, guided by comments made recently by the BOE’s Carney. Retail sales on Friday will be the next key domestic release this week.

Risk Recovering

Risk assets have started the day on a positive footing as risk sentiment remains supported by today’s scheduled signing of the US/China trade deal which has been in the works since October last year. A Chinese delegation is in Washington to sign the deal today which should then pave the way for talks to move onto the next stage. SPX500 trades 3284.48 last.

Safe Havens Lower

Safe havens have had a subdued session over the European morning on Wednesday. Both JPY and gold have been roughly flat against USD as traders await the next directional catalyst. XAUUSD trades 1552.40 last, capped by the 1554.69 level for now. USDJPY trades 109.88, with JPY a little weaker against USD.

Crude Capped By API Report

Oil prices have been rather flat today also, with crude trading 58.18 last. Yesterday, the API reported a build in US crude stores of 1.1 million barrels. Traders will now be looking to today’s headline EIA release, which could see further downside in crude if the inventory surplus is confirmed.

Loonie Higher Again

USDCAD has been higher again today with price breaking out above the 1.3068 level again following a failed attempt earlier in the week. Should today’s EIA report come in bearish, CAD is likely to be weaker allowing for further upside in the pair.

Aussie Still Down

AUDUSD has been lower again today with price extending down to lows of .6882 before recovering to .6888 as of writing. Strength in USD, as well as dovish RBA expectations, are keeping AUD bias skewed to the downside here with the US/China trade deal now offering only limited support.