Forex news for North American trade on October 18, 2018:

Markets:

  • Gold up $3.50 to $1225
  • WTI crude down $1.05 to $68.70
  • S&P 500 down 40 points to 2768
  • US 10-year yields down 3.2 bps to 3.17%
  • JPY leads, GBP lags

It was a classic risk off day with the yen leading the way and stock markets falling. Sentiment deteriorated later in the day as Italian debt crumbled on the ongoing budget dispute with the EU. Italian 10-year yields were up 14 bps to 3.69% and the spread over German debt rose to the most since 2013.

Still, the euro wasn't particularly hard hit. It finished the day down 45 pips to 1.1460 with the September low of 1.1436 as an important spot to watch in the day ahead.

The Canadian dollar struggled as oil prices fell and talk of weaker global growth does the rounds. USD/CAD rose 60 pips to 1.3078 and it briefly hit 1.3088, which was a five-week high. It also looks set to close above the 100-day moving average with Canadian data on retail sales and CPI due Friday.

The yen crosses all struggled led by GBP/JPY, which was down 175 pips to 145.98. The commentary from EU and UK leaders on Brexit was upbeat but the sentiment was not. Cabel finished nearly a full cent lower at 1.3020 and at the worst level since Oct 4.

AUD/USD finished nearly flat, which was a win for the Aussie give the backdrop. The outperformance was due to the drop in Australian unemployment to 5.0% from 5.3% in a report earlier in the day. The pair still finished on the lows and within striking distance of cycle lows.