Kiwi rallies on upbeat economic data, Dollar gains against Yen ahead of U.S.-China trade talks, Asian shares nudge higher - Tuesday, October 8th, 2019.
- Gold edges lower ahead of trade talks
- Oil edges higher on supply worries
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Retail Sales
Key Events Ahead
- (0300 ET/0700 GMT) ECB non-monetary policy meeting
DXY: The dollar index eased ahead of upcoming U.S.-China trade talks in Washington. On Monday, U.S. and Chinese deputy trade negotiators launched two days of talks aimed at paving the way later this week for the first minister-level negotiations in months. The greenback against a basket of currencies traded 0.05 percent down at 98.93, having touched a low of 98.64 on Thursday, its highest since September 25.
EUR/USD: The euro steadied after falling from a near 2-week peak in the previous session on European Central Bank's comments, stating that half of the euro zone’s biggest banks wouldn’t survive a six-month cash drought, with larger firms and subsidiaries of foreign institutions among the most vulnerable. The European currency traded flat at 1.0976, having touched a high of 1.0999 on Thursday, its highest since September 25. Investors’ attention will remain on a series of data out from the Eurozone economies and ECB non-monetary policy meeting, ahead of the U.S. producer price index, Fed Evan and Chair Powell's speech. Immediate resistance is located at 1.1019 (61.8% retracement of 1.1109 and 1.0879), a break above targets 1.1059 (78.6% retracement). On the downside, support is seen at 1.0952 (10-DMA), a break below could drag it below 1.0904.
USD/JPY: The dollar surged, extending previous session gains after a Fox Business reporter tweeted that the Chinese Commerce Ministry said that China is ready to do a deal with the United States on parts of negotiations both sides agree upon. The major was trading 0.1 percent up at 107.54, having hit a low of 106.48 on Thursday, its lowest since September 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Fed Evan and Chair Powell's speech. Immediate resistance is located at 107.67 (21-DMA), a break above targets 107.95 (September 26 High). On the downside, support is seen at 106.96 (September 24 Low), a break below could take it near at 106.32 (September 5 Low).
GBP/USD: Sterling consolidated within narrow ranges, amid increasing concerns about a lack of progress between Britain and the European Union to agree a Brexit withdrawal deal. The major traded flat at 1.2296, having hit a high of 1.2413 on Thursday, it’s highest since September 25. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2356, a break above could take it near 1.2400. On the downside, support is seen at 1.2233 (September 9 Low), a break below targets 1.2194 (August 23 Low). Against the euro, the pound was trading flat at 89.25 pence, having hit a low of 89.36 on Friday, it’s lowest since Sept. 13.
AUD/USD: The Australian dollar surged, reversing some of its previous session losses, as top-level U.S.-China trade talks are scheduled to resume later in the week, when Chinese Vice Premier Liu He meets with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington. The Aussie trades 0.3 percent up at 0.6749, having hit a high of 0.6773 on Friday, it’s highest since October 1. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6687, a break below targets 0.6635. On the upside, resistance is located at 0.6799 (August 21 High), a break above could take it near 0.6803 (September 25 High).
NZD/USD: The New Zealand dollar rallied after data showed the government's surplus rose by $2 billion to $7.5 billion in the fiscal year ended June 2020, while the net government debt dropped to 19.2 percent of GDP, down from 19.9 percent a year ago. The Kiwi trades 0.5 percent up at 0.6315, having touched a high of 0.6336 on Friday, its highest level since September 25. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6348 (September 25 High), a break above could take it near 0.6391 (September 16 High). On the downside, support is seen at 0.6266, a break below could drag it below 0.6249.
- Asian shares nudged up in early deals, while investors remained cautious ahead of tense U.S.-China trade talks.
- MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
- Tokyo's Nikkei gained 1.1 percent to 21,611.90 points, Australia's S&P/ASX 200 index rallied 0.5 percent to 6,593.40 points and South Korea's KOSPI surged 0.9 percent to 2,040.25 points.
- Shanghai composite index rose 0.5 percent to 2,920.71 points, while CSI 300 index traded 0.9 percent up at 3,849.19 points.
- Hong Kong’s Hang Seng traded 0.7 percent higher at 25,992.13 points. Taiwan shares shed 0.8 percent to 11,017.31 points.
- Crude oil prices surged, supported by overnight gains in industrial commodities, while unrest in oil-producing countries Iraq and Ecuador raised concerns of supply disruption. International benchmark Brent crude was trading 0.5 percent up at $58.36 per barrel by 0518 GMT, having hit a low of $57.13 on Thursday, its lowest since August 7. U.S. West Texas Intermediate was trading 0.5 percent higher at $53.03 a barrel, after falling as low as $52.27 on Thursday, its lowest since August 7.
- Gold prices declined, extending losses for a third straight session, weighed down by a stronger greenback and an uptick in equities ahead of upcoming U.S.-China trade talks in Washington. Spot gold was trading 0.2 percent down at $1,490.67 per ounce by 0520 GMT, having touched a high of $1,519.53 on Thursday, its highest since September 25. U.S. gold futures dropped 0.6 percent to $1,495.20.
The Australian government bonds remained flat on the second trading day of the week Tuesday, as investors remained side-lined in a muted session ahead of the Reserve Bank of Australia’s (RBA) Financial Stability Review, scheduled to be released by end of this week. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded steady at 0.896 percent, the yield on the long-term 30-year bond also remained flat at 1.497 percent and the yield on short-term 2-year too hovered around 0.644 percent.