Forex news for North American trade on October 7, 2019:
- China says it won't change IP laws, will deal with it through regulations
- China ready to do deal on parts of deal both sides agree on. But tougher issues to be discussed next year
- US lawmakers blindsided by Trump's decision to leave Syria
- Trump warns he will obliterate Turkey if they go offside
- EU details fundamental objections to Boris Johnson's Brexit plan
- Boris Johnson wants to see more movement from EU on Brexit
- Kudlow: I don't want to predict the outcome of US-China trade talks
- Fed's Kashkari says he doesn't know yet how much more to cut rates
- White House memo outlines topics for US-China trade talks
Markets
- Gold down $12 to $1493
- WTI crude up 7-cents to $52.88
- S&P 500 down 13 points to 2939
- US 10-year yields up 2.5 bps to 1.55%
- CHF leads, AUD lags
The headline driver today was a Fox Business report about China willing to do a trade deal, but only on a limited number of topics and with plans to shift to the tougher talks to next year. I'm not so sure that's great news but USD/JPY liked it enough to climb to a session high of 107.46. A second round of headlines saying that IP law changes were off the table turned sentiment in stocks but USD/JPY held most of its gains.
EUR/USD did a round trip to 1.1000 from 1.0975 in North America trade. The euro shook off some soft economic data early in European trading but finishes the day virtually flat.
Cable continues to feel the weight on Brexit uncertainty as the EU makes its objections clear. The pair fell 34 pips to 1.2297 on the day and finishes near the lows and close to short-term support that stretches down to 1.2275.
The commodity block was uninspired for the most part. USD/CAD fell early on oil strength but that didn't last even with bombs falling on the Kurdish border region. There's no oil there but it could ramp up the Iran/Saudi proxy war.
The late day slump in US stocks weighed on AUD/USD but only in a modest sense. The pair finished at the lows of the day and China is returning from holiday in the day ahead, so more volatility is a risk.
