Forex news for North American trading on October 30, 2018:
- US October consumer confidence 137.9 vs 135.9 expected
- Germany Oct prelim CPI +2.5% y/y vs +2.4% expected
- US August Case-Shiller 20-city house price index +5.5% vs +5.8% y/y expected
- BOC's Wilkins: Wage gains to accelerate
- BOC's Poloz: Canada's economy operating at near its capacity
- EU: Italy's planned fiscal expansion is incompatible with a debt cut
- OPEC and non-OPEC partners mulling a cut - report
- China's big banks were seen buying up US dollars today
- Dallas Fed services sector outlook 14.1 vs 25.6 prior
- ECB's Praet: It 'takes time' to reach inflation goal
- Salvini: Italy will continue as planned on the budget
Markets:
- Gold down $5.50 to $1223
- WTI crude down 86-cents to $66.18
- US 10-year yields up 3 bps to 3.11%
- S&P 500 up 41 points to 2682
- AUD leads, GBP lags
Sentiment was tentatively positive in early North American trade but you knew that at some point there would be a test. It came and (for a change) the market passed and that was followed by a late rally in stocks and a 1.6% gain. With that, USD/JPY continued higher to finish at 113.04, which is the best since October 9 and a 66 pip gain.
Now whether that's due to better risk appetite or US dollar demand into month-end is an open question. The US dollar index hit the best levels of the year at the same time.
Driving the dollar was euro and GBP weakness. The pound has been hit by waves of soft data, a budget without anything to spur growth and the never-ending Brexit drama. Cable will be a place to watch as it approaches the August lows.
It's a similar situation for the euro as it drifts down towards the August low of 1.1300 and last week's low of 1.1337. German CPI was a bit on the hot side but that wasn't enough to overcome soft growth data including a weak Italian GDP print.
USD/CAD tried the upside for a second day but looks to have made a double top just ahead of 1.3150 and is now tracking down towards the daily low near 1.3100. It gained alongside the rest of the commodity bloc as sentiment improved.
