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US FX Market Open –Thursday, August 11, 2016: Sterling one-month lows vs EUR and USD

Posted by Marge Maresca on Aug 11, 2016 8:01:48 AM

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Overnight Events

• NZD/USD +0.75%, USD/JPY +0.2%, GBP/USD -0.3%
• Big Kiwi swings after RBNZ rate cut
• Sterling struggling again at 1-month lows
• EUR/GBP hits a 5-week high of 0.8611
• DXY+0.3%, DAX +0.6%, Brent +0.10%, Iron -1.72%
• RBNZ Cuts OCR  25bps to 2.0%
• RBNZ says further policy easing maybe needed
• RBNZ monetary policy to remain accommodative
• NZD/USD spikes to 0.7351 from 0.7187 then slips to 0.7245
• AUD/NZD loses a big figure before finding its feet
• UK Jul RICS Hse Survey +5 vs revsd +15 prev, +6 exp
• DE Aug TR IPSOS 55.3 vs 56.10 prev
• UK Aug TR IPSOS 49.2 vs 49.45 prev
• SE July CPIF +1.4% y/y vs 1.5% prev, +1.2% exp
• IEA cuts 2017 oil demand growth f.cast by 0.1 mln BPD to 1.2 mln
• Russian Pres. Accuses Kiev of new Crimea provocations

Currency Summaries

EUR/USD   
• Tripped stops under 1.1161 Asia low, 55/10DMA’s 111.52-47  for 1.1135
• DXY off lows to add a little weight. Daily cloud base drops to 1.1125
• Support Wed’s 1.1113, Tues 1.1071 lows. 21/30DMA 1.1087
• Today’s hi 1.1192, 3/2 Aug' hi 1.1226/34, 100DMA 1.1230, cloud top 1.1264
• Option expiries 1.1100 (573M), 1.1130-35 (530M), 1.1190-1.1200 (1.1BLN)
 
USD/JPY  
• 101.02-50 today. Fell 101.96-100.97 Wed' , from mid 102's Tues'/Mon'
• Solid support last week’s 5/4/3/2 Aug lows 100.87/86/75/68
• 55HMA 101.59, 200HMA 101.66 and falling hourly cloud base 101.56 cap
• Hourly cloud base in to 101.25 later.  USD 781mln 101.00 option expiries
• Break below last week’s lows opens 8 July 99.99 and 24 June 99.00 lows
• EUR/JPY well contained 112.72-113.32
 
EUR/CHF
• EUR/CHF second day of losses and low of 1.0868
• Cross back inside daily cloud after 200DMA rejection Wed
• Nothing major as a fresh fundamental driver
• USD/CHF marginally better bid at 0.9760 but looks to struggle
• Chart: http://reut.rs/2aDsf5K
 
GBP/USD  
• GBP/USD fell from 1.3019 to a 1mth low of 1.2936 during the European am
• Sentiment influenced by IIF report headlined “Brexit to hit British economy hard”
• EUR/GBP rose from 0.8577 to a 1mth high of 0.8611 during the European am
 
USD/CAD  
• USD/CAD met headwind pre-1.3085 late Asia, 1.3037 = European am low
• 1.3020 (Asia low) & 1.3000 are support levels. 1.3025 & 1.3000 expiries today
 
AUD/USD   
• AUD/USD topped out two pips shy of 0.7726 after firming from 0.7691 (late Asia low)
• 0.7726 = Asia high. 0.7760 = knee-jerk high after RBNZ cut at 5pm ET Wednesday
 
NZD/USD
• NZD/USD eased to a European am low of 0.7239 as the post-RBNZ dust settled
• 0.7351 was 15mth high after 25bp RBNZ OCR cut at 5pm ET Wednesday
• AUD/NZD is a cent above its 1.0552 Asia low. 1.0550 = knee-jerk low after OCR cut

Today’s events

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.  

Option Expirations(Source:ThompsonReuters)

• NZD based vols clumped as RBNZ risk priced out after f/c 25bpts cut
• EUR/USD vols by long term lows. AUD vols have found support
• USD/JPY curve off lows since Wed’s spot setback
• 1mth expiry gets ECB, 3mth vols up since Tues on US election capture
• GBP/USD vols stay heavy with market long downside

Looking Ahead - Economic Data (GMT) - (Source:ThompsonReuters)

• 12:30 CA Jun New Hse Price Index Mkt 0.3%, 0.7% prev
• 12:30 Initial Jobless Claims 06 Aug mkt 265k, prev 269k
• 12:30 Continued Claims 30 Jul mkt 2.140 mln, prev 2.139 mln
• 12:30 Import Prices Jul mkt -0.3% m/m, prev +0.2%
• 12:30 Export Prices Jul mkt 0.0% m/m, prev +0.8%

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

• 15:45 FedTrade ops 30-year Fannie Mae ; Freddie Mac max $2.075 bl

Topics: US FX Market Open

 

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