Forex News Analysis by LiteForex

Morning Market Review
2019-09-17 08:49 (GMT+2)
EUR/USD

EUR showed a decline against USD on Monday, retreating from its local highs of August 27 updated at the end of last week. The pressure on the instrument was provided by weak data from China, as well as by a number of statements by representatives of the ECB that noted the low growth rates of the European economy. Retail sales in China in August showed a slowdown from 7.6% to 7.5% YoY with a forecast of +7.9% YoY. Over the same period, Industrial Production slowed down from +4.8% YoY to +4.4% YoY, which also turned out to be worse than the forecast of +5.2% YoY. During today's Asian session, the instrument shows corrective growth, awaiting the publication of European statistics on business sentiment. However, analysts do not foresee a confident growth of the pair, therefore, only weak USD exchange rate could perhaps help the “bulls”.

GBP/USD

GBP fell against USD at the beginning of the current trading week, reacting to several factors. Investors are still concerned about the slow pace of development around Brexit. There is not much time left until the deadline, and Boris Johnson is trying more to enlist the support of his supporters, rather than looking for ways to get the agreement approved in parliament. Johnson’s meeting with European Commission President Jean-Claude Juncker was unsuccessful. Moreover, the British Prime Minister reiterated his intention not to request a postponement of Brexit. It is likely that Johnson will try to ignore the parliament’s ban on the hard Brexit, but this threatens to exacerbate the political crisis in the UK, which will negatively affect the country’s economy if it does leave the EU at the end of October.

AUD/USD

AUD showed ambiguous trading dynamics against USD on Monday, falling under pressure from weak macroeconomic statistics from China. In addition, investors are actively reacting to the aggravation of the situation in the Middle East and the increased threat of a US war with Iran. Last weekend, the oil refining facilities of Saudi Arabia were attacked, which caused a rapid increase in oil prices. The US was quick to blame Tehran for the attacks, and Donald Trump announced his readiness to retaliate after confirming the suspicions of Saudi Arabia. During today’s Asian session, the pair shows a downward trend. Investors are focused on statistics from Australia and published minutes of the RBA meeting of September 3, at which the rate was maintained unchanged at 1.00%. Australian Housing Price Index in Q2 2019 showed a decline of 0.7% QoQ after a decrease of 3.0% QoQ last month. Analysts had expected a decrease of 1.0% QoQ.

USD/JPY

USD showed strong growth against JPY on Monday. However, it is worth noting that the instrument opened with a significant gap down, so by the end of the trading session USD only managed to recoup its losses at the opening. Meanwhile, JPY is supported by the aggravation of the situation in the Middle East after a series of attacks on oil refineries in Saudi Arabia. The United States accused Iran of assault and declared readiness to retaliate if Saudi Arabia confirms Tehran’s responsibility for the attack. During today's Asian session, the pair is trading in both directions. Investors expect the situation in the Middle East to develop and are awaiting the publication of macroeconomic statistics from the USA on retail sales and industrial production in August.

Oil

Oil prices showed ambiguous dynamics on Monday, after the market opened with record growth of more than 10% amid a worsening situation in the Middle East. At the weekend, oil refineries in Saudi Arabia were attacked by drones, which led to a reduction in Saudi production by half. The United States accused Iran of assault, saying it was ready to strike back if Saudi Arabia confirms Washington’s suspicions. In addition, Donald Trump approved the use of petroleum products from the US strategic reserve to help stabilize supply and demand in the market. On Tuesday, investors focus on the American Petroleum Institute Crude Oil Stock report for the week as of September 13, which last time showed a decrease in reserves of 7.2 million barrels. There is little hope that today’s report will be positive.

Morning Market Review
2019-09-18 08:48 (GMT+2)
EUR/USD

EUR showed strong growth against USD on Tuesday, recovering from an equally strong decline of the instrument at the beginning of the week. The growth of EUR was largely technical in nature, while macroeconomic statistics remained contradictory. German ZEW Economic Sentiment in September showed an increase from –44.1 to –22.5 points with a forecast of –38.0 points. German ZEW Current Conditions for the same period fell from –13.5 to –19.9 points, which turned out to be worse than the forecasts of –15.0 points. The EU ZEW Economic Sentiment in September grew slightly from –43.6 to –22.4 points, exceeding forecasts of –37.4 points. Today, the pair is trading in both directions. Investors expect the publication of the results of the Fed meeting, at which, as expected, the interest rate will be reduced by 0.25 points.

GBP/USD

GBP rose against USD on Tuesday, updating local highs of July 19. The instrument is supported by timid optimism regarding the Brexit deal, as there has been some change in mood in the parliament. At the same time, threat of hard Brexit remains, and earlier, Prime Minister Boris Johnson said that he would not ask the EU for another postponement, as required by the bill recently adopted by the parliament. During today's Asian session, the pair is trading with a decrease. On Wednesday, investors are focused on statistics from the UK on consumer and industrial inflation in August, as well as a decision by the Fed on interest rate.

AUD/USD

AUD showed ambiguous dynamics against USD on Tuesday, recovering to the opening levels from local lows of September 6. The instrument managed to strengthen against the background of the publication of good macroeconomic statistics from the United States. Industrial production in August showed an increase of 0.6% MoM after a decrease of 0.1% MoM last month. Analysts had expected increase by +0.2% MoM. Capacity Utilization Rate in August also increased from 77.5% to 77.9%, exceeding the forecast of 77.6%. Today, the instrument is declining, pending the publication of the Fed decision on the interest rate. In addition, investors are waiting for the release of a report on the Australian labor market on Thursday.

USD/JPY

USD showed ambiguous trading dynamics against JPY on Tuesday, updating local highs of early August. Yesterday's macroeconomic statistics from the US provided some support for USD, but moderate demand for safe haven assets leveled the entire “bullish” advantage of the dollar. During today's Asian session, the instrument is again trading in both directions, awaiting the Fed's decision on the interest rate. Statistics from Japan was contradictory. Japanese exports went down by 8.2% YoY in August after the decline by 1.5% YoY in the previous month. Analysts had expected even larger decline by –10.9% YoY. Imports collapsed by 12.0% YoY for the same period after a decline of 1.2% YoY last month. Forecasts suggested a decrease of 11.2% YoY. The deficit of the adjusted Trade Balance in August amounted to 136.80B yen, which is slightly worse than the previous value of –126.751B yen, but noticeably better than market expectations of –268.40B yen.

Oil

Oil prices fell on Tuesday, after Saudi Arabia reported that the previous production volumes could be fully restored within a few weeks. Over the weekend, oil refineries in Saudi Arabia were attacked by drones, which halved production volumes and intensified the crisis in the Middle East. Oil reacted to these events with significant growth, updating highs of the end of May. API Weekly Crude Oil Stock report published on Tuesday reflected a moderate increase in reserves for the week as of September 13 at 0.592 million barrels after a decrease of 7.200 million barrels over the past period. On Wednesday, in addition to the publication of the Fed decision on the interest rate, investors expect the release of EIA Crude Oil Inventories report.

Morning Market Review
2019-09-19 08:37 (GMT+2)
EUR/USD

The European currency again showed a decline against the US dollar on Wednesday, partially offsetting the active growth of the instrument the day before. The development of the downtrend was promoted by contradictory macroeconomic statistics from Europe, as well as by the results of the meeting of the Fed, at which the US regulator made a predicted decision to reduce the interest rate to 2.00%. Euro area's CPI in August showed a slight increase of 0.1% MoM after a decline of 0.5% MoM last month. Analysts expected a more active growth of +0.2% MoM. In annual terms, inflation growth remained at the previous level of 1% YoY. Construction Output in the euro area in July fell by 0.73% MoM after rising by 0.64% MoM last month. The indicator was worse than the forecast of +0.70% MoM. In annual terms, production volumes slowed down from +1.6% YoY to +1.1% YoY, which turned out to be slightly better than the forecast of +1.0% YoY.

GBP/USD

The British pound showed a decline against the US dollar on Wednesday, retreating from its local highs, updated the day before. Pressure on the instrument was provided by statistics on Consumer Inflation published in the UK. CPI in annual terms slowed down from +2.1% YoY to +1.7% YoY, which turned out to be worse than the forecast of +1.8% YoY. Core CPI for the same period strengthened by 1.5% YoY with the forecast of 1.8% YoY. In monthly terms, the index growth accelerated from 0.1% MoM to +0.4% MoM, which did not reach the forecast of +0.7% MoM. Another negative factor for the pound is still the situation around Brexit. Earlier the European Commission approved the possibility of delaying the deadline for Brexit, but reminded the UK of financial obligations. Today, investors are focused on the Bank of England meeting on the interest rate. Given the high degree of uncertainty surrounding Brexit, the British regulator is not expected to make any changes to the monetary policy vector, however, official comments will continue to be important.

AUD/USD

The Australian dollar showed an active decline on Wednesday and continues the steady development of the downtrend during today's Asian session. The Fed’s decision to lower the interest rate to 2.00%, which was published the day before, only slightly affected the position of the American currency, since it had long been incorporated into current quotes. Investors are focused on the statistics on the Australian labor market today. Employment Change in August showed an increase of 34.7K jobs after an increase of 41.1K last month. Analysts expected only +10.0K. Participation Rate increased from 66.1% to 66.2%, which also turned out to be better than the forecast. At the same time, the Unemployment Rate in August expectedly increased from 5.2% to 5.3%.

USD/JPY

The US dollar closed Wednesday trading with moderate growth against the Japanese yen, updating local highs of August 1. During today's Asian session, the instrument shows an active decline, retreating from updated highs. In addition to a number of technical factors, pressure on the pair is exerted by the decision taken by the Fed yesterday to lower the interest rate to 2.00%. Despite the fact that the decision of the US regulator was quite predictable, a certain intrigue persisted, and some analysts expected more active actions of the regulator, as repeatedly called on by Donald Trump. Jerome Powell did not disclose any plans for the remaining year, noting only that they “will act according to the situation.” Today, investors are focused on the Bank of Japan meeting on the interest rate. As expected, the Japanese regulator left the key rate unchanged at –0.1%, indicating growing risks and a high level of uncertainty in the global economy.

Oil

Oil prices continued a moderate decline on Wednesday, developing a downtrend since the beginning of the week, when the instrument opened with a sharp upward gap in response to a series of attacks on the oil production capacities of Saudi Arabia. On Tuesday, quotes plummeted amid statements by Saudi Arabia about the full restoration of oil production in a few weeks. Additional pressure on the instrument yesterday was exerted by the EIA report indicating an increase in oil inventories for the week as of September 13 by 1.1M barrels. The volume of oil production in the United States did not change and amounted to the previous 12.400M barrels per day.

Morning Market Review
2019-09-20 08:38 (GMT+2)
EUR/USD

The European currency showed strong growth against the US dollar yesterday, at some point reaching levels of opening trading on Wednesday, which ended with a fairly confident decline of the instrument. At the close of yesterday's session, the euro retreated, having lost most of its gains. The reason for the appearance of a corrective pullback was good data from the United States. Existing Home Sales in August increased by 1.3% MoM after growth of 2.5% MoM last month. Analysts had expected decline by 0.4% MoM. Philadelphia Fed Manufacturing Index in September fell from 16.8 to 12.0 points, which was still better than market expectations of 11.0 points. During today's Asian session, the euro is trading with an increase again. Investors expect publication of German PPI and preliminary data on Consumer Confidence in the euro area in September.

GBP/USD

The British pound rose significantly against the US dollar on Thursday, updating local highs of July 15. The Bank of England Meeting Minutes published the day before did not affect the dynamics of the instrument, since they fully met market expectations. The British regulator unanimously decided to keep the interest rate at the current level of 0.75%. The volume of the quantitative easing program remained at around 435 billion pounds. In turn, statistics on Retail Sales in the UK exerted little pressure on the pair. In August, the indicator fell by 0.3% MoM after growth of 0.4% MoM last month. In annual terms, the index has slowed from +3.4% YoY to +2.7% YoY, with the forecast of +2.9% YoY. The main factor behind the growth of the pound was the comments of European Commission President Jean-Claude Juncker, who noted that he believed in the conclusion of the Brexit deal before October 31.

AUD/USD

The Australian dollar is slightly correcting against the US currency during today's Asian session, recovering from two days of steady decline. Contradictory data on the Australian labor market put pressure on the instrument on Thursday. Despite a steady increase in employment by 34.7K jobs in August, the country's Unemployment Rate reached new highs at 5.3%, which is likely to push the RBA to new measures to stimulate the economy. Nevertheless, after a series of world regulators meetings, the attention of investors is once again shifting to the process of negotiations between the US and China, which should begin in October. So far, the prospects for a new round of trade talks look very encouraging.

USD/JPY

The US dollar fell against the Japanese yen on Thursday, retreating from local highs, updated the day before. The decrease in the instrument is largely technical in nature, since the market situation is not changing much. Demand for the Japanese currency is supported by a further decrease in forecasts for world GDP growth and the uncertain situation around Brexit and the new round of US-Chinese trade negotiations. During today's Asian session, investors focus on consumer inflation statistics from Japan. In August, the National Consumer Price Index slowed down from the previous +0.5% YoY to +0.3% YoY, which turned out to be twice worse than forecasts. The investment indicators were also negative. Foreign Bonds Buying for the week as of September 13 slowed from 727.2 to 476.0 billion Japanese yen. Foreign investment in the Japanese stocks fell by 971.9 billion yen after a decrease of 161.5 billion.

Oil

Oil prices corrected on Thursday, departing from local lows, updated after a steady decline in quotes at the beginning of the week. The situation with drone attacks on Saudi oil production complexes is gradually fading into the background, but now investors are paying attention to the depletion of oil reserves in Saudi Arabia, which will not allow it to restore supply volumes just as easily in the event of new attacks. Meanwhile, the situation in the Middle East remains tense. The day before, US President Donald Trump ordered to significantly increase sanctions against Iran, which could lead to a new round of crisis in the region.

Morning Market Review
2019-09-23 08:43 (GMT+2)
EUR/USD

The European currency showed a moderate decline against the US dollar on Friday, returning to previous local lows of September 17. The development of negative dynamics was facilitated by weak macroeconomic statistics from Europe. Germany's Producer Price Index fell by 0.5% MoM in August after rising by 0.1% MoM in the previous month. Analysts expected a decline of 0.2% MoM. YoY, the index growth slowed down from +1.1% to +0.3%, which also turned out to be worse than forecast of +0.6% YoY. Preliminary data on Consumer Confidence in the euro area also did not provide significant support for the euro. In September, the indicator slightly increased from –7.1 to –6.5 points, which turned out to be better than expectations of –7.0 points. During today's Asian session, the pair is growing, being influenced by technical factors. Investors are awaiting the publication of Markit PMI in Europe for September.

GBP/USD

The British pound fell against the US currency on Friday, retreating from updated local highs of July 5. Investors are again concerned about the threat of a tough Brexit, which serves as an additional source of market uncertainty. Speaking on Friday, European Commission President Jean-Claude Juncker said that Britain’s withdrawal from the EU without an agreement would lead to border controls between Ireland and Northern Ireland. Juncker noted that he still counts on concluding a final deal, but the risks of a “tough” scenario cannot be ignored. During today's Asian session, the pair is trading upwards, and investors expect new drivers to appear on the market. With the opening of the American trading session, investors expect publication of Markit PMI in the US for September.

AUD/USD

The Australian dollar showed a steady decline against the US currency on Friday, updating local lows of September 4. The instrument remains under pressure amid the worsening growth prospects of the global economy and the lack of visible progress in US-Chinese trade negotiations, which should become more active in early October. During today's Asian session, the pair is trading with a slight increase. Investors are focused on Commonwealth Bank PMI in Australia. In September, according to preliminary estimates, Manufacturing PMI fell from 50.9 to 49.4 points, which turned out to be worse than expectations of 50.9 points. Services PMI increased from 49.1 to 52.5 points, which was significantly better than expectations of 45.3 points. Composite PMI in September rose from 49.3 to 51.9 points, confidently consolidating above the psychological mark of 50 points.

USD/JPY

The US dollar fell against the Japanese yen on Friday, continuing to develop the “bearish” impulse formed the day before. Investors are holding long positions amid a worsening crisis in the Middle East. At the end of last week, US President Donald Trump approved the dispatch of US troops to Saudi Arabia to strengthen defense after the attack on oil production facilities that occurred the week before last. It is too early to speak of the beginning of a full-fledged military operation, but alarming signals worry investors and increase interest in safe assets. Today, the pair is trading in both directions, waiting for the appearance of new drivers at the market. Japanese markets are closed due to the Autumn Equinox Day, so all the attention of traders is focused on American and European statistics.

Oil

Oil prices rose slightly on Friday, but returned to negative dynamics closer to the end of the afternoon session. Quotes are supported by rising tensions in the Middle East after an attack on key oil production facilities in Saudi Arabia the week before last. The Kingdom announced a military operation north of the city of Hodeidah, while Donald Trump approved the sending of troops to Saudi Arabia to strengthen defense capabilities. In addition, it became known that Riyadh is actively importing oil production equipment from the United States, so that by the end of the month most of the stopped facilities can be restored. Baker Hughes report released last Friday indicated a sharp decrease in the number of active oil rigs in the US from 733 to 719 rigs, which also provided significant support for quotes.

Morning Market Review
2019-09-24 08:37 (GMT+2)
EUR/USD

The euro showed a decline against the US dollar on Monday, continuing the development of an uncertain "bearish" impulse formed at the end of last week. The pressure on the instrument yesterday was exerted by German PMI data, which again came out worse than market expectations. Markit Services PMI in May declined from 54.8 to 52.5 points with the forecast of the decline to 54.3 points. Over the same period, Manufacturing PMI fell from 43.5 to 41.4 points with a positive forecast of 44.0 points. Composite PMI in September fell from 51.7 to 49.1 points, which also turned out to be worse than expected 51.4 points. The situation with the euro area's indices as a whole is very similar to German data, especially in the manufacturing sector. During today's Asian session, the pair is trading in both directions, and investors are expecting IFO Business Sentiment in Germany for September.

GBP/USD

The British pound fell against the US dollar at the beginning of the new week, showing the development of a negative impulse formed last Friday. Pressure on the instrument is still exerted by the prospects of a tough Brexit, which will have the most negative consequences for the British economy. On Monday, the macroeconomic background in the UK remained empty, so investors were focused on the US data on business activity, which supported USD. Markit Manufacturing PMI in September showed an increase from 50.3 to 51.0 points. Services PMI rose from 50.7 to 50.9 points, which, however, did not reach the forecast of 51.3 points. Composite PMI for September strengthened from 50.7 to 51.0 points, which turned out to be significantly better than expectations of 49.6 points. Today, the pair is trading in both directions. Investors expect publication of data on the volume of placements of 30-year government bonds and public sector borrowing for August. In addition, the market is awaiting the release of a report from CBI on the volume of industrial orders in September.

AUD/USD

The Australian dollar showed ambiguous trading dynamics on Monday, remaining in the area of local lows updated on September 20. Statistics on Australian PMI turned out to be contradictory and did not provide significant support for the national currency. The Commonwealth Bank Manufacturing PMI fell from 50.9 to 49.4 points in September, which turned out to be worse than the forecast of 50.9 points. Services PMI increased from 49.1 to 52.5 points, which was significantly better than expectations of 45.3 points. Composite PMI in September rose from 49.3 to 51.9 points, confidently consolidating above the psychological mark of 50 points. Today, the pair is trading in both directions. Investors are not in a hurry to open new positions before the speech of the head of the RBA, Philip Lowe, who is likely to speak about the prospects for further easing of monetary policy.

USD/JPY

The US dollar showed a decline against the Japanese yen on Monday, updating local lows of September 10. Nevertheless, closer to the end of the afternoon session, the instrument managed to recoup, which was caused by the publication of good statistics on business activity from the USA, which looked especially good in contrast to weak European data. Japanese markets were closed on Monday due to the Autumn Equinox Day. Today, the pair is trading in both directions. Some pressure on the yen was exerted by Japanese data on business activity. Jibun Bank Manufacturing PMI in September fell from 49.3 to 48.9 points, which turned out to be worse than market expectations.

Oil

Oil prices showed a slight increase on Monday, responding to improved prospects for the restoration of previous oil production volume in Saudi Arabia. However, the instrument again finished trading in the red zone, which was caused by a short-term strengthening of the US currency. Additional pressure on the quotes was provided by weak data on German Manufacturing PMI. Today, investors are awaiting API Weekly Crude Oil Stock report for the week as of September 20.

Morning Market Review
2019-09-25 08:43 (GMT+2)
EUR/USD

The euro showed moderate growth against the US dollar on Tuesday, recovering from an amplitude decline in the instrument the day before when the instrument was actively sold amid the publication of weak data on business activity in the manufacturing sector in Germany. German statistics on Tuesday turned out to be significantly better, although in this case there were some negative points. Current Assessment from the IFO in September showed an increase from 97.3 to 98.5 points with a forecast of 97.0 points. Business Climate index for the same period increased from 94.3 to 94.6 points against the forecast of 94.5 points. Business Expectations turned out worse than expected and fell in September from 91.3 to 90.8 points against the forecast of growth to 91.8 points. During today's Asian session, the euro is trading with an increase again. Investors are awaiting the outcome of the ECB meeting and the speech of the representative of the European regulator Benoit Coeuré.

GBP/USD

The British pound showed growth against the US dollar yesterday, recovering from new local lows of September 17. The growth of the instrument was facilitated by news that the UK Supreme Court found the suspension of parliament illegal. Thus, the parliament should begin its work on Wednesday, which will give more time to work out a decision on the agreement with the EU. Meanwhile, the position of Boris Johnson remains unchanged, and no real progress has been achieved in negotiations with the European Commission, so a new delay in Brexit is the best scenario for today. The macroeconomic statistics from the UK published on Tuesday was contradictory. Public Sector Net Borrowing in August rose by 5.766 billion pounds after a decline of 1.472 billion in the previous month. Analysts expected a growth of 6.650 billion. CBI Industrial Trends Orders indicated a decrease in the volume of orders in September from –13 to –28 points, which turned out to be significantly worse than market expectations.

AUD/USD

The Australian dollar strengthened significantly against the US currency on Tuesday, recovering from an uncertain start of the week. The instrument was supported by the results of a speech by RBA head Philip Lowe, who expressed optimism regarding the future prospects of the Australian economy, which, in his opinion, will demonstrate steady growth in the near future, but no significant acceleration should be expected. A positive effect should be achieved by a tax refund, which will increase income from households. Regarding the prospects for monetary policy, Lowe still takes a “dovish” position and believes that in the future the Australian economy may need an additional rate cut. During today's Asian session, the instrument again shows a steady decline, losing positions earned the day before.

USD/JPY

The US dollar continued its active decline against the Japanese yen on Tuesday, updating local lows of September 9. The development of negative dynamics in the instrument was facilitated by the weakening of the US currency over the market, while interest in the yen was maintained against the backdrop of increasing uncertainty in the Middle East and around Brexit. Yesterday's US and Japanese statistic was ambiguous. The Japanese Leading Index in July showed an increase from 93.6 to 93.7 points, which turned out to be better than forecasts. Coincident Index for the same period increased from 99.5 to 99.7 points, while investors expected growth to 99.8 points. Data from the United States indicated a decrease in Richmond Manufacturing Index in September from 1 to –9 points with a forecast of –11 points. Redbook Retail Sales Index for the week as of September 20 showed a decline of 1.1% MoM after a decrease of 0.9% MoM over the past period.

Oil

Oil prices fell significantly on Tuesday, responding to weak macroeconomic statistics from Europe, which intensified the risks of a slowdown in the global economy. At the same time, investors are still counting on a quick recovery in oil production in Saudi Arabia, which also puts pressure on quotes. Another “bearish” factor was the report of the American Petroleum Institute on oil reserves. For the week as of September 20, the report reflected growth in stocks by 1.400 million barrels after growth of 0.592 million barrels for the previous period. Today, investors are awaiting the publication of an official report on oil reserves from the US Department of Energy.

Morning Market Review
2019-09-26 08:51 (GMT+2)
EUR/USD

European currency showed a steady decline against the US dollar on Wednesday, updating local lows of September 12. The reason for the appearance of downward dynamics was the technical factors of correction of USD, which underwent sales on Tuesday due to the reports of the beginning of Donald Trump's impeachment procedure. Despite the fact that it is unlikely that it will be possible to get approval for impeachment in parliament, which is controlled by the Republicans, the situation itself may adversely affect the political situation in the country. An additional factor of USD growth is an increase in the yield of treasury bonds and an in corporate demand. Macroeconomic statistics from the United States also provided moderate support to the dollar. New Home Sales in August showed an increase of 7.1% MoM after a decrease of 8.6% MoM in the previous month. Analysts had expected growth by 3.5% MoM.

GBP/USD

The British pound fell against the US dollar on September 25, retreating under the onslaught of the growing US currency. Additional pressure on the instrument was exerted by weak macroeconomic publications from the UK. Gross Mortgage Approvals in August fell from 43.303K to 42.576K applications, which turned out to be worse than the forecasts. The main factor contributing to the weakening of the pound, is still the situation around Brexit. The market was optimistic about the decision of the UK Supreme Court to declare the suspension of parliament unlawful. However, now the parliament is plunging into political battles with Prime Minister Boris Johnson, which does not contribute to the development of a final agreement with the EU.

AUD/USD

The Australian dollar showed an active decline paired with the US currency, updating local lows of September 3. The instrument reacted with sales to a massive strengthening of the US dollar across the entire market, while the fundamental background did not change much. Today, the instrument also is trading with an increase. Investors expect the publication of statistics from the United States. The focus is on updated data on the dynamics of US GDP for Q2 2019, as well as statistics on Pending Home Sales and KC Fed Manufacturing Index.

USD/JPY

The US dollar rose significantly against the Japanese yen on Wednesday, retreating from its local lows of September 9, updated the day before. The emergence of corrective dynamics in the instrument, in addition to the large-scale growth of the American currency across the entire market, was facilitated by the statements of the Bank of Japan Board member Takako Masai, who noted that the regulator is ready for new measures to stimulate the economy in case inflation slows down to the target level of 2%. Masai also emphasized increased external economic risks amid the approaching Brexit deadline and the lack of progress in US-Chinese trade negotiations.

Oil

Oil prices showed a noticeable decline on Wednesday, but managed to recover closer to the end of the afternoon session. The development of negative dynamics was facilitated by the worsening prospects for a trade deal between the United States and China, after Donald Trump criticized China’s position at the UN General Assembly on Tuesday. At the same time, Trump unexpectedly spoke out for the possibility of improving the situation around Iran. The US Department of Energy report released on Wednesday also put pressure on quotes. According to the report, over the week as of September 20, Crude Oil Inventories rose by 2.412M barrels after growth of 1.058M barrels over the past period. Analysts had expected a decrease of –0.249M barrels. Refinery Utilization Rates in the United States fell by 1.4% to 89.9%, which exceeded forecasts. US oil production rose to 12.500M barrels per day, compared to 12.400M last week.

Morning Market Review
2019-09-27 08:43 (GMT+2)
EUR/USD

The European currency showed a decline against the US dollar on Thursday, updating local lows from mid-May 2017. Pressure on the instrument is still exerted by weak macroeconomic statistics from the euro area, which indicates not the most optimistic prospects for the development of the European economy. In addition, technical factors play against the euro. Despite the fact that the instrument has approached local lows traders are still eager to bet on its decline, while its volatility is rapidly declining. During today's Asian session, the pair is correcting upwards. Nevertheless, the market is just waiting for the appearance of new drivers on Friday. Investors will be focused on statistics on Business Sentiment and Consumer Confidence in the euro area in September. Traders are also interested in German Import Price indices and are awaiting a speech by ECB Vice President Luis de Guindos.

GBP/USD

The British pound remains downward paired with the US currency, updating local lows of September 12. The main factor contributing to the decline in the pound remains the uncertain situation around Brexit. There is less and less time for concluding a final agreement with the EU, while Prime Minister Boris Johnson and the British Parliament are engaged in an internal political struggle. Johnson reaffirmed his position regarding the request for an additional delay, despite the fact that non-compliance with the adopted law threatens Johnson with a prison. Today, the pair is trading in both directions. Slight support for the pound is provided by data on Gfk Consumer Confidence. In September, the indicator rose from –14 to –12 points, which turned out to be better than expectations of –14 points.

AUD/USD

The Australian dollar showed ambiguous dynamics against the US currency on Thursday. The morning growth of the instrument gave way to a decline after the opening of the American session, as the market was filled with relatively good macroeconomic statistics from the USA. Pending Home Sales in August increased by 1.6% MoM and 2.5% YoY, which turned out to be significantly better than the data for the previous period (–2.5% MoM and –0.3 % YoY) and the forecasts (+0.9% MoM and –1.9% YoY). PCE Prices in Q2 2019 increased by 2.4% QoQ after an increase of 0.4% QoQ in the previous period. The final annual data on US GDP indicated a 2% growth in the US economy in Q2 2019, which coincided with market forecasts.

USD/JPY

The US dollar showed a slight increase against the Japanese yen on Thursday, updating local highs of September 20. The strengthening of the US currency was facilitated by optimistic macroeconomic statistics from the United States. In addition, analysts note an increase in demand for USD amid increased political struggles in the US and the UK, as well as continued trade tensions. During today's Asian session, the pair is trading lower, despite the publication of weak macroeconomic statistics on consumer inflation from Japan. Tokyo CPI ex Food and Energy (YoY) slowed down from +0.7% in September to +0.5%, with the forecast of +0.6%. Tokyo CPI for the same period slowed down from +0.6% YoY to +0.4% YoY, which turned out to be worse than the forecast of +0.8% YoY.

Oil

Oil prices showed ambiguous trading dynamics on Thursday. During the day, mainly "bearish" dynamics was observed, since Saudi Arabia is rapidly recovering oil production volumes, which decreased after the drones attack. Pressure on the instrument also persists after the publication of the US Department of Energy report, which indicated an increase in oil reserves with a simultaneous increase in production volumes to new record levels. In turn, optimism for the instrument comes from Donald Trump's statements that an agreement between the United States and China could be signed in the near future. In addition, the US President and Japanese Prime Minister Shinzo Abe also signed a bilateral trade agreement, which will contribute to the growth of trade between the countries.

Morning Market Review
2019-09-30 08:40 (GMT+2)
EUR/USD

EUR showed moderate growth against the US dollar on Friday, retreating from the lows of May 2017. The reason for the uptrend was the correctional sentiment and technical factors of the end of the week, intensified after the release of ambiguous macroeconomic statistics from Europe and the USA. Industrial Sentiment Index in euro area in September fell from –5.8 to –8.8 points with a forecast of –6.0 points. Business and Consumer Survey in September also showed strong negative dynamics, retreating from 103.1 to 101.7 points with a forecast of 103.0 points. Business Climate Index for the same period collapsed from 0.12 to –0.22 points with a forecast of 0.11 points. American statistics, in turn, disappointed with weak data on Durable Goods Orders. Uncertain statistics on Personal Spending also exerted pressure on the dollar. In August, the indicator slowed down from +0.5% MoM to +0.1% MoM with a forecast of +0.3% MoM.

GBP/USD

GBP continues to weaken against USD, updating local lows of September 9. Pressure on the British currency last Friday was exerted by a statement by Bank of England member Michael Saunders, who spoke out in favor of changes in interest rates due to the negative impact of external factors and growing uncertainty around Brexit. Meanwhile, the situation around Brexit continues to be complicated by the growing political struggle within the country. As reported by The Sunday Times last weekend, opposition parties in the British parliament are discussing the possibility of impeaching Boris Johnson. Today, the pair is trading in both directions. The pound expects the publication of macroeconomic statistics from the UK, including final data on the dynamics of UK GDP for Q2 2019.

AUD/USD

AUD showed moderate growth against USD on Friday, partially offsetting a steady decline in the instrument on Wednesday. The growth of the instrument was facilitated by the improvement of sentiment around the US-Chinese trade negotiations, which should resume on October 10-11 and will be held in Washington. Trump is very optimistic and is holding back the introduction of new import duties for the time being. The Chinese side also shows significant interest as Beijing has returned to the procurement of American agricultural equipment, as well as beef and pork. Today, the pair is trading in both directions. Moderate support for the instrument is provided by Caixin PMI published in China. Manufacturing PMI in September increased from 50.4 to 51.4 points against the forecast of 50.2 points.

USD/JPY

USD showed moderate growth against JPY on Friday, updating local highs of September 19. The growth of the instrument at the end of last week was facilitated by weak data on consumer inflation from Japan. Tokyo Core CPI slowed in September from +0.7% YoY to +0.5% YoY, which turned out to be worse than market expectations of +0.6% YoY. Tokyo CPI in September grew by only 0.4% YoY, which turned out to be twice worse than market expectations. Today, the pair is trading in both directions. Optimism from Japanese retail sales statistics was offset by weak manufacturing data. In August, Retail Sales grew by 4.8% MoM and 2.4% YoY with a forecast of 0.0% MoM and +0.9% YoY. According to preliminary estimates, Industrial Production collapsed in August by 1.2% MoM and 4.7% YoY with a forecast of –0.5% MoM and –1.8% YoY.

Oil

Oil prices showed a decline at the end of last week, responding to the rapid recovery of production in Saudi Arabia after the drone attack on the country's oil production capacity. In addition, investors reacted negatively to a partial ceasefire in Yemen after Yemeni Hussites made the same move last week. Thus, for some time, the parties managed to avoid further escalation of the conflict, which puts pressure on quotes. In turn, Baker Hughes report on active oil platforms in the US released on Friday provided moderate support for prices. During the reporting week, the number of drilling rigs in the United States decreased from 719 to 713 units.