Session Wraps - Major Forex Headlines wrapped up by trading session

Forex news for Asia trading Thursday 6 August 2020 

We saw some early small flows into currencies out of the USD despite mixed news out of Washington on economic relief legislation negotiations. Trump has indicated he will take executive action (no details provided) on unemployment and eviction relief on Friday if Congress fail to reach agreement by then.

US infectious diseases expert Fauci was in the news, saying there will be a vaccine by year end and into Q1 of 2021; if he is correct that is encouraging news. He did say also though that large scale dosing (in the billions) is much further out. 

As mentioned, currencies traded a touch higher against the dollar early. AUD/USD, for example added 20 points. PM Morrison outlined Treasury forecasts of a big hit to GDP and employment due to the stage 4 lock downs in Australia's 2nd largest city and state, Melbourne in Victoria, which saw the currency fall back to its lows. NZD/USD has been weaker.

AUD up early then gave it all back:

aud wrap 06 August 2020

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Talk the talk about new Forex news for North American traders on August 5, 2020

In other markets today:

  • Spot gold is trading up $19 or 0.94% at $2038.10. Another new record all-time high was reached at $2055.79. The low price reached $2009.77
  • Silver at an even stronger day to the upside. It is currently trading up $0.93 or 3.58% at $26.94. The high price extended to $27.14. The low price fell to $25.38
  • WTI crude oil futures race to the highest level since early March as it searched to a session high $43.52. The low price reached $41.47 early in the session. The inventory data for the week came and with a larger than expected drawdown but not as large as the API private data. As a result there was some profit-taking against the highs for the day. The current price is trading at $42.17. That's up $0.47 or 1.13%. Technically the 50% of the 2020 range comes in at $41.71. On the topside the 200 day moving average is at $43.92. 
Today, the ADP employment change data came in much weaker than expected with a rise of 167K vs 1200K estimate. The US employment statistics will be released on Friday with nonfarm payroll expected to show a 1500K increase.  Although much weaker, the ADP data has not done a great job mimicking the Labor Department employment data.  Case in point, the prior month's number was revised to 4313K vs 2369K initially reported (so only off by about 2 million).  HMMMMM.

In other news, the trade deficit came in at $-50.7 billion. I know COVID is getting in the way, but little progress has been made in the trade deficit as it stands nearer high deficit levels. 

Good news came from ISM service index which rose to 50.1 from 55.0 estimate (and preliminary).  

The USD started the day as the weakest of the major currencies, and moved even lower into the London close. However, after the dollar index (DXY) fell to a low of 92.563 failed to get to and through the July 31 low of 92.546, the sellers turned to buyers in the NY afternoon session.  A modest  move higher has taken the DXY to 92.846 currently.  

Talk the talk about new _Forex news for North American traders on August 5, 2020

The dollar was still the weakest of the majors going into the close, but there is some potential that the double bottom may be the short term bottom as well.  Tomorrow will be a key day for the greenback.  PS. a new low in the DXY would be the lowest low since May 2018. 

Below is a ranking of the strongest to weakest today. The CHF and EUR overtook the AUD as the strongest. The USD and JPY tightened up the battle for weakest by the close.

US dollar was the weakest of the majors
In other news today, the negotiations for the next coronavirus stimulus bill continues to be stalled.  

It seems the GOP is leaning a little bit more toward an emergency employment number of $400 per week vs. the original post of $200. State and local relief is still a problem point of discussion according to officials

US stocks continued their run to the upside. The S&P and down close higher for the 4th consecutive trading day. The S&P is only 2% away from its all-time high. The NASDAQ index close at a record level once again. It is now on a 6 day winning streak.  European shares also closed  higher but with mixed up and down results.

Major indices closed higher and near the highs for the day

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Author: Justin Low

Forex news from the European trading session - 5 August 2020

Headlines:

Markets:

  • AUD leads, USD and JPY lag
  • European equities higher; E-minis up 0.6%
  • US 10-year yields up 2 bps to 0.528%
  • Gold up 1.2% to $2,044.07
  • WTI up 3.9% to $43.34
  • Bitcoin up 1.9% to $11,425

EOD 05-08
There weren't much notable headlines as the market stuck with theme from North American trading yesterday, where gold rallied and the dollar faltered.

Gold extended gains by a little over 1% in a push to fresh highs above $2,040 while silver is advancing by more than 3% and moving closer towards $27.

Risk trades also fared much better as European indices are putting in a solid shift so far alongside US futures, which are up by ~0.6% currently.

As such, the dollar is seen on the decline with EUR/USD pushing higher from 1.1810 to 1.1860 while GBP/USD saw some back and forth - moving up to 1.3120 before falling to 1.3060 - but is ultimately settling higher at around 1.3130-40 levels now.

Meanwhile, AUD/USD is also extending gains above 0.7200 in a push from 0.7180-90 to 0.7220 while USD/CAD is easing further on stronger oil prices as well in a fall from 1.3300 to 1.3240 levels currently - lowest levels since February.

It is all about the strength in gold and weakness in the dollar at the moment, with risk trades also taking comfort in the whole situation - cheered on by Trump and his 'big' jobs number coming up later this Friday.

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Forex news for Asia trading Wednesday 5 August 2020 

After leaping above $2,000 during US trade gold carried on higher to touch above $2,030 before losing some steam. On the currency board, NZD was a gainer after a strong beat on the most recently reported headline unemployment rate. Further details in the jobs report were not as encouraging but the headline of 4.0% unemployment (yes, really) was enough to hold NZD/USD fairly steady around its highs for the session circa 0.6640.

AUD/USD managed to gain some points alongside the stronger kiwi despite another surge in coronavirus cases in its second largest city (to a double record high day of +725 newly confirmed infections and +15 deaths) and another internal border closure; northeastern state Queensland will shut down its border to Australia's largest state of New South Wales from Saturday.

EUR, GBP, yen and CHF all found a small bid also against the US dollar on the session here. Early in session comments from Trump that the jobs number would be 'big' did currencies no harm although moves were not large.

The early days of the month are data-heavy but apart from the NZ jobs report other data did not have much FX-moving impact on the session. There was progress reported out of the US on coronavirus economic relief package negotiations, albeit tentative.

As I post the latest from the Wall Street Journal on another COVID-19 treatment showing positive signs is giving currencies a further little lift against the USD). 


Forex news for Asia tradingWednesday 5August 2020 

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