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US FX Market Open – Monday, March 20, 2017: Dollar on the back foot at start of week

Posted by Marge Maresca on Mar 20, 2017 7:26:17 AM

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Overnight Events

• EUR/USD +0.1%, USD/JPY +0.1%, GBP/USD +0.1%, DXY flat
• DAX -0.4%, CAC -0.5%, Brent -1.2%, Gold +0.4%, Copper -0.6%
• Dollar fals for 4th day after G20 trade message - Rtrs
• GBP/USD rises to 3-week high of 1.2436 in early London trade
• DE Feb Producer prices 0.2% m/m, 3.1% y/y vs prev 0.7%/2.4%. 0.3%/3.2% f/c
• EZ Q4 Labour cost growth 1.6% vs prev 1.4% rvsd fm 1.5%
• EZ Q4 Wage growth 1.6% y/y vs prev 1.5% rvsd fm 1.6%
• SNB domestic deposits rise to 470.893bln w/e Mar 17 vs prev 467.429
• Germany's economic advisers reject criticism of current account surplus - Rtrs
• Scottish leader softens stance on possible independence vote timing - Rtrs
• Russian finmin says rouble overvalued by up to 12% - agencies - Rtrs

Currency Summaries

EUR/USD
• Limited range 1.0777-53 early London, 1.0732 early Asian low
• Fri's 1.0728-82 range contains, Bids touted 1.0720-10, Thurs low 1.0706
• Offers 1.0780-1.0800, more ahead of 02 Feb 1.0829 peak
• DXY heavy but holds above 100.00. 2yr UST off early lows, 10's steady
• Market awaits first French election TV debate at 19GMT. O/n vol 11.0/50 pips

USD/JPY
• Quant funds said to have sold USD/JPY in Asia
• USD/JPY fell to 112.46 before recovering to 112.84
• Long market remains in a bind since Fed "dovish" hike
• EUR/JPY has traded a 120.91-121.41 range

USD/CHF
• Off Fridays's 0.9943 base but soft dollar weighs
• Corrective bounce has been limited. Plays 0.9958-0.9986 in Europe
• Price action contained by 30-DMA lower bolli, today at 0.9944
• Cross firmer in early Europe to 1.0746 then off to 1.0732
• SNB sight depo data continues to highlight SNB action

GBP/USD
• GBP/USD met headwind at 1.2436 after heading north in early Ldn trade
• 1.2436 = Ichi cloud top. 1.2400 = subsequent low. 1.2400 expiry for NY cut
• EUR/GBP has traded a 30 pip range thus far Monday, 0.8660-0.8690

USD/CAD
• USD/CAD rose by nearly a cent from 1.3304 (early Ldn low) as oil prices fell
• WTI circa 48 bucks/barrel at 6.20am ET, 70 cents lower on the day
• 1.3340 option expiry for NY cut, $370mn strike

AUD/USD
• AUD/USD extended north to a 4mth high of 0.7748 in early European trade
• 0.7729 was Asia high (0.7720 was last week’s high). Stops tipped above 0.7055

NZD/USD
• NZD/USD threatened 0.7080 (early Asia high) in early European trade
• 0.7010 was Asia low. RBNZ is expected to keep OCR at 1.75% this week

Today’s events

Option Expirations (Source:ThompsonReuters)

An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

• Vols hit long term lows across the board last week but meet demand
• Value/bargain hunters taking advantage of very low levels
• EUR and JPY related gamma propped in to French TV debates
• AUD/USD end users have finally started to buy vols there
• GBP vol demand tame as ranges hold. JPY wary of 111.5-11.00 barriers

Economic Data (GMT) - (Source:ThompsonReuters)

• 12:30  Chicago Fed National Activity Index (Feb) (prev -0.05)

Events, Other Releases (GMT) - (Source:ThompsonReuters)

• 12:30  FRB Chicago's Evans in live television interview on Fox Business News
• 15:45  FedTrade 30-year Ginnie Mae (max $825 mn)
• 16:00  FRB Chicago's Evans speaks at NYABE luncheon; New York, NY

 

Topics: US FX Market Open

 

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