North Korea fears spark $USD reversal, Yuan strength leads to start week $CNY
Summary
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Renewed North Korea fears derailed the USD rally post NFP on Friday, causing technical reversals in many markets. Traders now focused on USDCNY, which has sold off decisevly since China has returned from holidays.
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USD now firmly lower from Friday's levels as we head into NY trading. Some positive data suprises from the UK and an absense of more negative news for Theresa May seems to be helping GBP. Euro traders are noting positive data suprises as well (German and Italian industrial production) and rather hawkish commentary from the ECBs Lautenschlager, but the US/GE yield spread not really participating. The Yen is tracking gold higher. Traders noting a heavy week of option expires ahead (over 20 yards of USD going off between 112 and 113). The broadly weeker USD is lifting CAD and AUD too, but overextended long positioning in those currencies continues to weigh.
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It's a light week for major economic data. US Retail Sales and CPI will be the focus (Friday). A reminder the Japanese elections are Oct 22. China's 19th congress kicks off Oct 18. Some traders talking about a speech expected from Catalan leaders around noon today.
Currency Calendar
| Date | Releases / Holiday | Entity |
|---|---|---|
| October 10, 2017 | Catalan Parliament Session | EUR |
Bank holidays and impactful report releases for select countries.
Market Analysis Charts
USD/CAD Chart
EUR/USD Chart
USD/CNY Chart
Charts: TWS Workstation
About the Author
Erik Bregar - Trader
Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.
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