In forex today, constrained volumes continue to plague the Asia-Pacific market session, and broader assets continue to lean increasingly into the bearish camp while the US Dollar enjoys a continued bounce against the majority of G10 currencies.
Dollars up on Fed
A hawkish US Federal Reserve, which sees at least five more rate hikes from now until the end of 2019, is propping up the Greenback across the broader markets, sending traders piling into the US Dollar at the expense of everything else. Dollar action continues to be the main driver with China on extended holidays, and volume-constrained markets sent everything lower against the USD. The Aussie saw better-than-expected Trade Balance figures for August, but still couldn’t get wheels underneath itself in time to avoid setting a new low for 2018.
EUR/USD: Below 61.8% Fib retracement after 6 days of straight losses, but not oversold
The current Euro sell-off is seeing more room to run, with European bond yield differentials continuing to widen as traders balk at Italian headlines.
GBP/USD grappling to stay above 1.29 as US NFP Friday looms ahead
The UK sees a very quiet market session ahead, and there is little else for Sterling traders to do but brace for further Brexit headlines, though little progress has yet to materialize as all sides bicker and throw barbs at each other, and broader markets will be buckling down for another hectic US NFP Friday to cap off a volume-tight week.
Key notes from the Asian session
Fed to hike five more times to the end of 2019 – Goldman Sachs
Australia logged a bigger-than-expected trade surplus in August
GBP/USD: value of GBP puts (bearish bets) has hit highest since June 2017
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