Forex headlines for Oct 4, 2013:
- Boehner insists on Obamacare changes to end shutdown
- Tea Party lawmaker says budget battle is lost
- US Boehner says won’t rely on democratic votes to pass debt limit
- Italian Senate committee votes to expel Berlusconi after tax fraud conviction
- Canadian Ivey PMI 51.9 vs 53.6 expected
- Non-farm payrolls delayed due to shutdown
- On the week AUD leads, GBP lags
- On the day AUD leads, GBP lags
- S&P 500 gains 12 points to 1690.54
USDJPY traded down to yesterday`s lows but wasn`t able to push lower as the support just below 97.00 continues to attract bids. The market is seeing signs of Republican weakness and betting on a weekend deal, leading to a rally in risk trades. USDJPY rose to 99.45.
Besides bets on a day, the US dollar benefited from positions squaring. The market has been in EURUSD longs as the pair hits 8-month highs but no one wanted to be long if or when a deal is struck so some positions squaring led to a sizeable drop midway through US trading. From 1.3600 the pair fell to 1.3539, taking out some big stops below 1.3550. Last at 1.3553.
EURCHF continues to be a solid trade for the optimists. The bears tried the downside once again in early European trading but it was a one-way move higher from there, including a trade at 1.2300. The rally hit my targets on this trade.
The pound was an absolute dog all day. It sank in Europe, bounced 30 pips in early US trading and then swan dove to 1.6013 at the close — the low of the week.
Have a great weekend.
