Risk Sentiment Rebounding

Orbex Market Flash

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USD Higher on Monday

USD has been a little higher this morning, although moves have been limited. The market is expecting a quiet session this week as mid-summer trading lulls kick in. On the data front, there’s little to note, aside from Fed chairman Powell due to speak at the Jackson Hole Symposium on Friday. USD index trades 98.08 last.

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Euro Fighting to Get Higher

EURUSD has been slightly firmer against USD so far today. This is following a strong sell-off into the end of last week which saw price breaking down below the 1.1112 level. Price is currently still below this level, and given the concerns around the health of the eurozone and the expectations for further easing from the ECB, further downside is likely in the near term.

GBP Down on Brexit Document

GBPUSD has come under pressure once again today as the market reacts to the latest Brexit fears. The leaked Yellowhammer document highlights the government’s concern over the potential impact of a no-deal Brexit which could cause huge disruption according to the projections made. GBPUSD trades 1.2118 last, with price sitting near channel lows still.

Risk Assets Rally

Risk assets have started the week on a better footing. Following Trump’s comments on the solid progress being made in US/China trade negotiations, the SPX500 has traded up off last week’s lows to reclaim the 2908.55 level. Price trades 1915.93 last.

Safe Havens Down as Risk Recovers

Safe havens have been a little lower over the European session so far on Monday, given the better risk tone at the start of the week. Both JPY and gold have traded lower against USD as the market once again attaches optimism to the ongoing trade negotiations. USDJPY trades 106.55 last with price still capped by the 106.77 resistance for now. XAUUSD trades 1498.72 last, as price continues the sell-off from the rejection at the 1522.75 level.

Crude Supported

Oil prices have traded higher over the session so far also, though flows have been light. The recent volatility around the US/China trade story has calmed down for now and if we can see further positive headlines around negotiations, this could be good for oil. Crude trades 55.26 last with price sitting just off recent lows following the rejection at the latest test of the bearish trend line from July highs.

High Betas Bounce Back

USDCAD has come under pressure today. Despite a higher USD, it seems that better risk appetite in light of supportive comments around the US/China trade story is keeping CAD supported. USDCAD trades 1.3258 last with price having broken back beneath the 1.33 level.

AUDUSD is trading on a better footing today also, albeit only slightly. The consolidation around the .6758 level continues with price managing to remain above the level for now. Better risk appetite around the trade story is keeping AUD supported though the sell-off in gold is offsetting some of the positive impacts.

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