MARKET DEVELOPMENT – USD[1] Dominates, GBP/USD[2], AUD/USD[3] Heading Lower
DailyFX 2019 FX Trading Forecasts [4]
GBP[5] decline shows little signs of easing as Brexit uncertainty outweighs the better than expected Manufacturing PMI data. Recent support at 1.2260 gives way allowing for a test of the September 9th low (1.2232), in which a break below spells further woes for the Pound. While there is a plethora of UK data throughout the week, the key driver is Brexit, thus headline risk remains elevated. Eyes are firmly on UK PM Johnson’s Brexit plan announcement. [6]
Australian Dollar[7] heads down under after the RBA cut the OCR to a fresh record low of 0.75% while also signalling that rates could go lower if necessary. Consequently, the currency is testing its 2019 low of 0.6677 against the greenback, while widening interest rate differentials between Australia and Canada continues to favour AUD/CAD[8] lower.
US Dollar[9] remains dominant against its major counterparts with the index hitting a fresh 2-year peak. However, as the strength persists, questions will be asked as to how far the Trump Administration will let the Dollar run its current course. On the data slate, ISM Manfacturing PMI is key the data release on tap today.
WHAT’S DRIVING MARKETS TODAY
- “Gold Price Slumps but Looks Oversold as US Dollar Continues to Soar” by Nick Cawley, Market Analyst[10]
- “Crude Oil Technical Analysis - Multi-year Trend-lines Could Be Next” by Paul Robinson, Currency Strategist[11]
- “Brexit Latest: GBP/USD Eyes UK PM Johnson's Brexit Plan” by Justin McQueen, Market Analyst[12]
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