USD Quiet Ahead of FOMC
The US dollar has been a little weaker over the European session on Wednesday as a lack of key data drivers has turned attention elsewhere. Looking ahead today though, we have the release of the FOMC minutes. These could prove to be market moving if they offer any further clue as to whether the Fed is moving closer towards another rate hike as was suggested in the last meeting minutes. The index trades 97.89, not far off the 98.07 2019 high.
Euro Higher on Weak USD
EURUSD has traded a little better against USD so far today. Traders had been following Draghi’s remarks at a speech made in Frankfurt this morning. However, nothing market moving was noted and with no other EZ data on the sheet today, EURUSD quietly traded 1.1162 last.
GBP Down Heavily On New Brexit Plan
GBPUSD has been sold heavily again today following Theresa May’s unveiling of her new Brexit plan in parliament yesterday. The new plan will be put to a vote in just a few weeks. It offers MPs the chance to vote on whether to hold a second referendum on the terms of the deal. So far, the response has been widely negative and GBP is being hit hard on expectations that the PM will be defeated once again. GBPUSD trades 1.2666 last as price breaks below the 1.2670 support level.
Muted Risk Sentiment Midweek
Risk sentiment has been a little muted today with the SPX500 trading 2859.88, sitting just above the 2856.30 support. Today’s FOMC minutes could fuel a break below that level if the market senses any hawkishness from the Fed. On the other hand, a neutral tone should keep risk assets supported. Indeed, the UK100 is rising strongly today as GBP trades lower with the index now testing the 7368.3 level.
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Safe Havens Rise
Safe havens have been a little higher today amid a broadly subdued risk environment. Both JPY and gold have been higher against USD so far. However, moves have been very shallow. XAUUSD is now once again sitting back under the 1280.58 level which has been a key pivot over 2019 trading so far. And price trades 1274.30 last. USDJPY is trading 110.41 last with price still sitting well above the 109.70 support level.
Crude Capped By Inventories Build
Crude prices have turned lower again today, trading their third consecutive losing day as of writing. Yesterday’s API inventory report showed another unexpected build in US crude stocks. Traders are now waiting on the release of the EIA report later today to confirm the build. If it does, it will press oil down further. Crude trades 62.40 now, turning back down towards the 61.89 level as price looks to be putting in a lower high on the daily chart, suggesting the potential for another leg lower.
Commodity Currencies Higher
Despite the weakness in oil prices this week, CAD has been able to hold onto gains against USD. USDCAD traded 1.3394 last, marking a sharp reversal back below the 1.3469 level broken last week. Looking ahead today, Retail Sales are the main domestic data for CAD. But the FOMC will likely overshadow it.
AUDUSD has managed to trade higher this morning following a sharp move lower yesterday which almost broke fresh lows. With fears around the ongoing US/China trade war growing, it is likely that the recovery will be short-lived. Focus remains on further downside in the near term unless the fundamental backdrop changes drastically. AUDUSD trades .6894 last, still well below the .6982 support level recently broken.