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2017-10-10 08:15

North Korea fears spark $USD reversal, Yuan strength leads to start week $CNY

Source: EBC Trading Desk

Summary

  • 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.

  • 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.

  • 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


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Posted By Rachel Butler at 08:15 AM