Daily FX Trading Update: US Presidential Debates Take Central Stage

The US dollar was barely able to take advantage of the risk-off moves in the market and the slightly stronger than expected US new home sales report. Traders seemed hesitant to hold on to the currency ahead of today’s first set of US presidential debates, as the impact on opinion polls could have a huge say in overall risk sentiment. US CB consumer confidence data is due next and a slide from 101.1 to 98.6 is expected.
The euro got a boost from stronger than expected German Ifo business climate data, as the reading rose from 106.3 to 109.5. To top it off, ECB Governor Draghi reiterated in his testimony that the region is resilient even after the Brexit vote. German import prices data is due today and a 0.1% decline is eyed.
The pound managed to make a bit of a bounce against some of its counterparts even though there were no major reports out of the UK. BBA mortgage approvals was slightly weaker than expected at 37K versus the 37.2K estimate and the previous 37.7K figure. CBI realized sales data is due today and a drop from 9 to 8 in the index is expected.
The franc was able to hold its ground to the dollar but was mostly weaker to its other counterparts. Profit-taking may have been happening as the end of the week, month, and quarter is approaching. There are no reports due from the Swiss economy today and SNB head Jordan’s testimony yesterday didn’t have any surprises.
The yen regained ground against its peers as risk aversion was present in the financial markets. Earlier today, the BOJ monetary policy meeting minutes spurred a bounce since it contained more details on why the central bank is making its adjustments. No other reports are due from Japan for the rest of the day.
Commodity Currencies (AUD, NZD, CAD)
The Kiwi and Aussie took advantage of dollar weakness and also advanced against European currencies. The Loonie, on the other hand, was bogged down by the lack of a deal in the OPEC meeting and downbeat remarks from BOC Governor Poloz. There are no reports due from the comdoll economies today.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.