Currencies Remain Mixed as Uncertainties Persist
Thursday 26 September, 2019
Daily Currency UpdateUSD - United States DollarHeadlines across the world are emblazoned with an impeachment investigation against President Trump, announced by House speaker Nancy Pelosi. A whistleblower complaint against Trump was raised by an unnamed U.S. security services employee. The acting director of U.S. intelligence; Joseph Maguire will later face questions from the House Intelligence Committee in Washington. The U.S. Dollar Index (DXY) continued its trend upwards as the greenback pushed higher against a basket of currencies, topping out at the 99.13 and a retest of two-year highs. This was supported by the release of new home loans in the United States, as low mortgage rates stimulate the housing market. With a 7% increase in August the 12 year high showed sales of single-family homes were strongly improving. Initial Jobless Claims today posted in line with consensus at 213K vs 212K. The weekly number set off a slew of releases from the U.S. with Wholesale Inventories 0.40%, Good Trade Balances -77.83Bn, Personal Consumption Expenditures 2.40%, and rounding off the releases, Gross Domestic Product Annualized for the U.S. inline at 2.00%.
Key MoversGeopolitical fears mean there is limited risk appetite in financial markets currently. The recent bombing of Saudi oil processing plants, Brexit, and the ongoing deadlock between the U.S. and China trade are all weighing on sentiment. President Donald Trump’s conversation with Ukrainian President, Volodymyr Zelensky has done little to lift the mood. Transcripts of the conversation by White House staff were released yesterday. An effort by the administration to diffuse accusations that the President applied pressure on Zelensky for personal interests to investigate the Democratic front runner, Joe Biden and son Hunter. Although the notes don't show any explicit effort to bribe the Ukrainian PM by withholding the hundreds of millions in military aid the U.S. provides to Ukraine. Democrats claim the tone is clear and the episode will hang over Trump for the foreseeable future as impeachment proceedings shift gears.All of the above means equity markets are mixed this morning. USD/JPY is retracing back towards the 107.50 and gold is keeping its head above $1500 an Oz. EUR/USD is down to 109.50 as concerns over the health of the Eurozone economy continue to compound the aforementioned geopolitical woes. Today sees the final reading of Q2 GDP from the States with no change from the prelim 2% predicted. We also have ECB Chief Mario Draghi and BoE Governor, Mark Carney talking at a conference in Frankfurt.Rulings in the U.K. by the Supreme Court have recently rocked the pound as a unanimous vote that the shutdown of parliament for a prolonged period of time by Prime Minister Boris Johnson was illegal. Putting Brexit decisions firmly up in the air again there now looks to be a push to put pressure on the PM to resign after only eight weeks at the helm. GBP/USD moved from 1.2500 overnight to 1.2350 on open this morning"
- USD/CAD: 1.3215 - 1.3301 ▲
- EUR/USD: 1.0925 - 1.0995 ▼
- GBP/USD: 1.2300 - 1.2425 ▼
- AUD/USD: 0.6727 - 0.6772 ▼
- NZD/USD: 0.6257 - 0.6300 ▼