US yields and $USD weaker overnight as Trump reveals short-list for next Fed chair $CAD $EUR $JPY
Summary
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Asia offers up USD across the board as Trump reveals his short list of Fed chair candidates. Yellen not looking so hot (Jeffrey Gundlach says no chance Trump wants Yellen). While betting markets (PredictIt) show Kevin Warsh out front, the more moderate Jerome Powell got a big jump on positive comments from Treasury secretary Mnuchin. US 10yr yields have been trending weaker ever since.
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AUDUSD the clear winner overnight with the market breaking back above 0.7850. EURUSD follows suit as the US/GE yield spread narrows, but yesterday’s NY high still resisting. Negative Euro-zone retail sales and the ongoing Catalonia drama a drag. The selling in GBPUSD finally stops after six straight days of position liquidation. Light EURGBP resistance in the 0.8880s and better than expected UK service PMI helping. USDJPY predictably lower with lower US yields, but finding support as longs continuing to accumulate (JPY open interest now up five days in a row, +40k contracts). USDCAD drifts lower on not much else than the broader USD weakness. The BOC’s Leduc comments yesterday were slightly dovish. TD likes selling USDCAD closer to 1.2650.
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US ADP jobs figures on deck for 8:15amET this morning (market expecting +140k). ISM Services at 10am. Oil inventories 10:30am (APIs last night reported a draw for crude and a build for distillates). Yellen gives a speech at a community banking event at 3pm. Aussie trade figures and retail sales tonight at 8pm.
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CME open interest changes 10/3: AUD +515, GBP -2064, CAD -319, EUR +1672, JPY +9227
Currency Calendar
Date | Releases / Holiday | Entity |
---|---|---|
October 4, 2017 | ECB President Draghi's Speech | EUR |
October 4, 2017 | Fed's Yellen Speech | USA |
Bank holidays and impactful report releases for select countries.
By The Numbers: Daily FX Snapshot
USD/CAD - Canadian Dollar
Dollar/CAD continues to struggle with key resistance in the 1.2520-30s. Some traders appear to be giving up as open interest is down for two straight days. Friday’s Cdn and US employment reports will be the key event risk of the week, but option markets are not bidding up premium all that much (1 week ATM straddle just 93 pts, and implied volatility (6.7%) well below month and week-ago levels). Market sitting at light support right now (1.2460s). Better support at 1.2410-20. Market needs to regain the 1.25 handle to resume upward momentum. While GBPCAD continues to be a drag, recent EURCAD buying looks like it could support USDCAD.
EUR/USD - European Central Bank Euro
The EUR has had a lot of headline risk to deal with today, but longs appear to be hanging in there. Support 1.1740s. Resistance in 1.1780s being tested as we speak. There’s talk again on the wires of huge option expiries, this time post NFP on Friday ($3.5bln from 1.1700-50). A rally back into the 1.18s would be technically positive on the charts.
USD/JPY - Japanese Yen
Fresh longs are getting tested today as USDJPY dips below yesterday’s NY low (112.70). Gold now up $9, silver up 1.4%, US 10yr futures on pace to test 125’20s (all a little bit bullish for JPY at the moment). The four recent faliures to rally above 113 on the daily chart appear to weighing on longs as well. Expect range-bound to lower action today unless the market can regain the 112.80s.
Market Analysis Charts
USD/CAD Chart
EUR/USD Chart
USD/JPY Chart
Charts: TWS Workstation
About the Author

Exchange Bank of Canada (EBC) is a Schedule 1 bank based in Toronto, Canada. EBC specializes in foreign exchange services and international payments providing a wide range of services to financial institutions and corporations, including banknote foreign currency exchange, travelers' cheques, foreign currency cheque clearing, foreign currency bank drafts, Global EFT and international wire transfers through the use of EBC's innovative EBCFX web-based FX software www.ebcfx.com.