Safe Haven Inflows Fuel USD Rally, GDP Data Next

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Safe Haven Flows Support USD

The headline move over the European morning on Thursday was the continued drive higher in USD. This has seen the USD index trading above 96.49 fresh highs as safe haven inflows have favored the US Dollar. Looking ahead to today’s European afternoon session, traders are waiting on the final US GDP print for Q4. We can expect this to come in unchanged at 2.4%, down from 2.6% prior.

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Weak Eurozone Data Weighs on EUR

A raft of weaker than expected data from the eurozone this morning has underpinned concerns about the strength of the economy. Speaking this week, Mario Draghi of the ECB confirmed that the ECB will be keeping rates on hold for the time being while it monitors the development of the economy. He stated that rate hikes can be postponed until the soft patch in data resolves. EURUSD is heading back down to the 1.1217 level support as the sell-off deepens.

GBP Down on Brexit Bungle

In the UK, news that parliament voted against all 8 Brexit options in a special voting session held yesterday has added further uncertainty to the ongoing Brexit negotiations. Theresa May now has until April 12th to secure a deal in a third parliamentary vote. We can clearly see the sense of fear among investors reflected today in the heavy tone of GBPUSD. The pair has traded down to fresh lows of 1.3125 today.

Equities Waiting On Trade Talk News

Equities prices have been equally subdued today with the SPX500 just managing to stay above the 2799.11 support. However, any positive news around the next round of US/China trade talks which get underway today in Beijing should provide some lift. The GER30 has been a little weaker today, also as Brexit uncertainty and European economic concerns weigh. For now, however, price is still managing to stay above the 11396.4 support level.

Gold Weighed Down By Rising USD

There is a mixed picture among the safe havens today as, despite a softer tone to equity markets, gold prices have come under fire with investors preferring to use the US Dollar. This sent XAUUSD down to daily lows of 1304.58. The Japanese Yen, however, has performed a little better today, with USDJPY plumbing daily lows of 110.01. That being said, we are seeing some recovery heading into the European afternoon.

Crude Lower on Bearish EIA Report

Oil prices have weakened today, after the latest report from the EIA yesterday showed an unexpected build in US crude stocks. The build has been linked to export disruption due to a fire in the Houston Ship Channel which caused a dramatic fall in exports this week. However, for now, crude is still above the 58.07 level support, keeping upside bias intact.

Commodity Currencies Mixed

The Canadian Dollar has been knocked lower against the US Dollar today. This comes as greenback strength and weakness in oil have combined to push USDCAD up. For now, though, price is yet to break above the 1.3439 high posted yesterday. AUD is having a little more luck today, just managing to breakeven against the US Dollar. AUD is likely underpinned by optimism around the US/China trade talks as traders await news from the first meetings being held today.

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