A quiet session with Hong Kong closed with the only notable movers being NZD and MXN.
Hong Kong was closed today as it weathered a T10 typhoon. But it seemed to matter not as Asia was content to sit and wait for ECB Governor Mario Draghi to speak at 08:25 London time in Germany followed by a swath of Eurozone PMI’s. In the case of the former, the street will be hanging on to every word for a signal to the timing of the ECB’s unconventional monetary policy. In the latter, the markets will be looking for a stronger performance to offset yesterdays surprisingly downbeat ZEW survey.
The two primary movers today were NZD and MXN which weakened, but for very different reasons. In the NZ Dollars case, the treasury released downgraded growth forecasts and budget surplus’ for the years ahead with saw the Kiwi topple 50 points to a low of 7230 in Asia trading. This trend appears to be continuing into early London as pre-election jitters, and a dovish central bank weighs on the flightless bird.
President Trump’s Twitter account weighed on the Mexican Peso. Mr. Trump said that he was willing to shut down the government to get funding to build the wall, and is likely to scrap NAFTA at some stage in an underwhelming vote of confidence in North/South relations. USD/MXN rallied from 17.6500 to 17.7450 as the market digested the news from two issues that have been quiet of late.
Later on this evening, we will get U.S> PMI’s as well as the official DOE Crude Inventories data which should bring some volatility (as if we didn’t need more) to WTI and Brent. The market is forecasting a drawdown of -3.6 million barrels of crude and a drawdown of 1 million bpd of gasolene.
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