Currencies Higher; Commodity Bloc Lags
Tags currency trading, dailyfx, forex, trading, usd
The markets have picked up in European trade, with currencies broadly bid against the buck.
MORNING SLICES
FUNDYS
However, it is the major currencies that have jumped in front, with the normally better bid commodity bloc lagging behind. There has been no apparent direct catalyst for the moves, with most citing the price action as flow based decent stop losses being triggered following a multi day consolidation. We have seen a great deal of major/commodity selling over the past several weeks, and perhaps investors are beginning to look to book profits on long commodity positions given the extremity of the moves. One potential explanation for the lag in the commodity currencies are the ongoing rumors of a potential tightening from China, which ultimately would weigh most heavily on the Australian economy and Australian Dollar.
Relative Performance Versus USD on Friday (As of 10:30GMT) –
1) SWISSIE +0.89%
2) EURO +0.72%
3) STERLING +0.64%
4) KIWI +0.40%
5) AUSSIE +0.29%
6) YEN +0.24%
7) CAD +0.17%
Another noticeable mover on the day has been the Eur/Chf cross, which has broken down through some major consolidation support just under 1.4600. This cross rate has barely moved in recent weeks and many pay close attention to any unusual moves, particularly to the downside, given the SNB’s reputation for getting involved. It appears that the Swiss central bank has been less comfortable with a stronger currency when the USD is offered, and today’s USD bearish price action could be just the catalyst for some sudden and aggressive SNB intervention.
Elsewhere, two articles in European newspapers are getting attention on Friday, with one in the UK Telegraph warning of the looming debt crisis, while the other, from an Austrian newspaper, outlining prospective bailout deal for Greece involving Germany and France. Some secondary data released on the session has not hurt the Euro’s rally, with Eurozone industrial production coming in stronger than expected.
Looking ahead, all eyes turn to Canada employment data at 13:30GMT (16k and 8.3% expected), also accompanied by the heavily watched US retail sales print (-0.2% expected). University of Michigan confidence (74 expected) then follows at 14:55GMT, followed by business inventories (0.2% expected) at 15:00GMT. US equity futures point to a slightly firmer open, while commodities are well bid.
GRAPHIC REWIND
Read the rest of this article at www.DailyFX.com
MORNING SLICES
FUNDYS
However, it is the major currencies that have jumped in front, with the normally better bid commodity bloc lagging behind. There has been no apparent direct catalyst for the moves, with most citing the price action as flow based decent stop losses being triggered following a multi day consolidation. We have seen a great deal of major/commodity selling over the past several weeks, and perhaps investors are beginning to look to book profits on long commodity positions given the extremity of the moves. One potential explanation for the lag in the commodity currencies are the ongoing rumors of a potential tightening from China, which ultimately would weigh most heavily on the Australian economy and Australian Dollar.
Relative Performance Versus USD on Friday (As of 10:30GMT) –
1) SWISSIE +0.89%
2) EURO +0.72%
3) STERLING +0.64%
4) KIWI +0.40%
5) AUSSIE +0.29%
6) YEN +0.24%
7) CAD +0.17%
Another noticeable mover on the day has been the Eur/Chf cross, which has broken down through some major consolidation support just under 1.4600. This cross rate has barely moved in recent weeks and many pay close attention to any unusual moves, particularly to the downside, given the SNB’s reputation for getting involved. It appears that the Swiss central bank has been less comfortable with a stronger currency when the USD is offered, and today’s USD bearish price action could be just the catalyst for some sudden and aggressive SNB intervention.
Elsewhere, two articles in European newspapers are getting attention on Friday, with one in the UK Telegraph warning of the looming debt crisis, while the other, from an Austrian newspaper, outlining prospective bailout deal for Greece involving Germany and France. Some secondary data released on the session has not hurt the Euro’s rally, with Eurozone industrial production coming in stronger than expected.
Looking ahead, all eyes turn to Canada employment data at 13:30GMT (16k and 8.3% expected), also accompanied by the heavily watched US retail sales print (-0.2% expected). University of Michigan confidence (74 expected) then follows at 14:55GMT, followed by business inventories (0.2% expected) at 15:00GMT. US equity futures point to a slightly firmer open, while commodities are well bid.
GRAPHIC REWIND
Read the rest of this article at www.DailyFX.com
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