• Financial Institutions
  • Corporations
  • Travelers
  • SOLUTIONS
  • Foreign Bank Note Exchange
  • International Drafts
  • International Wire Transfers
  • Global EFT
  • Foreign Check Clearing
  • Foreign Draft Issuance
  • INDUSTRIES
  • Travel
  • Technology Companies
  • Payroll
  • Healthcare
  • Nonprofit
  • Partnerships

Trump: "it might be better to wait until after the 2020 election for the China deal"

CXI December 3rd, 2019

 

Take control of your international payments with CXI FX Now.

• Zero transfer fees & great rates
• Fast international payments
• Safety and security
• Unparalleled customer service
• Consultative approach

Learn more about CXI's international payment services for businesses or call our trading desk directly at 1-833-572-8933.

Get real-time market coverage on twitter at @EBCTradeDesk or sign up here.

SUMMARY

Trump makes this comment while speaking to reporters at NATO summit in London.
Markets continue “risk-off” move from yesterday.  S&Ps, yuan, USDJPY all lower.
US yields playing catchup, plunge all the way back to 1.7550-1.77% breakout area.
USDCAD uptrend intact, with move back above 1.3300.  BOC meets tomorrow.
AUDUSD rallies after RBA delivers upbeat hold to interest rates, but softer since Trump.
GBPUSD breaks higher after polls show Tories regaining lead of Labour.
Funds continued to buy USD broadly during week ending Nov 26.
 

ANALYSIS

USDCAD

President Trump is coming to the rescue for the USDCAD market again this morning after telling reporters in London that “it might be better to wait until after the 2020 election for the China deal”.  He also said that he has no deadline on timing for the deal and that the “China deal is dependent on whether or not I want to make it.”  See folks…we’ve gone nowhere when it comes to US/China trade negotiations.  We’ve been harping on this point since the nonsensical, trade-hope-driven, October/early November rally in the US stock market and US yields.  The US/China trade war doesn’t need to be solved any time soon in our opinion.  It continues to be the convenient, scape-goat, narrative to explain everything that’s wrong with the global economy right now and so long as President Trump holds himself out as “the one” that can turn things around, he holds a Trump card (pun intended) that he can play to garner support and optimism into his 2020 election campaign.

For the time being though, global markets appear to be waking up to the US/China trade war charade and are going “risk-off”.  The S&P futures, Chinese yuan and USDJPY continue lower today, with US 10yr yields finally catching up to the downside.  The commodity currencies, AUD and CAD, are faltering as we head into NY trade.  Today’s economic/central bank calendar is very light, and so we think traders will focus on headlines out of the NATO summit in Europe, especially in light of Trump’s tough talk on France this morning and last night’s threat of punitive tariffs on 2.4blnUSD of French goods.  We think a NY close above the 1.3300 level is critical to maintaining the market’s upward momentum, and will put continued pressure on the fund net short USDCAD position (which shrunk for the 3rd week in a row during the week ending Nov 26 as shorts continued to cover).

USDCAD DAILY

USDCAD DAILY

USDCAD HOURLY

USDCAD HOURLY

JAN CRUDE OIL DAILY

JAN CRUDE OIL DAILY

EURUSD

Euro/dollar vaulted to its next major trend-line resistance level in the 1.1080s yesterday after the US reported a pretty dismal ISM Manufacturing PMI for the month of November.  The headline figure of 48.1 missed expectations of 49.2 but, to make matters worse, the prices paid, new orders, and employment sub-components also missed as well.  This unleased a wave of “data-driven” risk-off across the markets, which hurt the USD broadly.  Today’s “trade-related” risk-off move has caused some safe-haven USD buying, which seemed to hinder EURUSD’s second attempt to get above the 1.1080s earlier, but gold’s $10 rally this morning is helping to stem the slide.  The fund net short EURUSD position fell slightly during the week ending Nov 26.

EURUSD DAILY

EURUSD DAILY

EURUSD HOURLY

EURUSD HOURLY

FEB GOLD DAILY

FEB GOLD DAILY

 

GBPUSD

Sterling is plowing higher this morning as some UK polls like Kantar and YouGov showed the Tories extending their lead over the Labour Party heading into next week’s general election, and it’s been up, up, and away since the 1.2940s chart resistance level gave way to the upside.  We think the 1.3000 level we be the psychological pivot for today’s price action, and we think a NY close above this level would be yet another positive technical development for the market.  The funds re-build their net short GBPUSD position for the second week in a row during the week ending Nov 26, by liquidating longs and adding shorts.

GBPUSD DAILY

GBPUSD DAILY

GBPUSD HOURLY

GBPUSD HOURLY

EURGBP DAILY

EURGBP DAILY

 


 

AUDUSD

The Australian dollar rallied last night after the Reserve Bank of Australia kept interest rates on hold, citing “the long and variable lags in the transmission of monetary policy”, which it still believes is supporting employment and income growth.  While the RBA reiterated it was prepared to ease policy further “if needed”, we feel that the RBA’s verbiage above hints at them being more confident staying on the sidelines for the moment.  They want to see how things pan out.  AUDUSD surged up past chart resistance in the 0.6830s following the RBA announcement, but it has given back half of its gains this morning since the Trump remarks came out.  Australia reports its Q3 GDP figures tonight, with the market expectation being +0.5% QoQ and +1.7% YoY.

AUDUSD DAILY

AUDUSD DAILY

AUDUSD HOURLY

AUDUSD HOURLY

USDCNH DAILY

USDCNH DAILY

 


 

USDJPY

Dollar/yen is hemorrhaging losses again this morning and we have Trump’s “it might be better to wait” comments on the US/China trade deal to blame.  After falling sharply lower yesterday to test chart support in the 108.90s, the market has now fallen below that and made a bee line for the next major support level in the 108.60s.  US 10yr yields seem to be playing major catchup today, as they plunge back towards last week’s breakout zone in the 1.7550-1.77% area.  We think a move below this level could spell big trouble for the funds, which extended their net long position in USDJPY for the 5th week in a row during the week ending Nov 26.

USDJPY DAILY

USDJPY DAILY

USDJPY HOURLY

USDJPY HOURLY

US 10YR BOND YIELD DAILY

US 10YR BOND YIELD DAILY

Charts: Reuters Eikon


About the Author

Erik Bregar

Erik Bregar - Director, Head of FX Strategy

linkedin twitter

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact us or call CXI's trading desk directly at 1-833-572-8933.

 

About Currency Exchange International
Currency Exchange International, CXI, is the leading provider of comprehensive foreign exchange services, risk management solutions and integrated international payments processing technology in North America. CXI’s relationship-driven approach ensures clients receive tailored solutions and world-class customer service. Through innovative and trusted FX software platforms, CXI delivers versatile foreign exchange services to our clients, so that they can efficiently manage and streamline their foreign currency and global payment needs. CXI is a trusted partner among financial institutions, corporations and retail markets around the world. To learn more, visit: www.ceifx.com

Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

This publication has been prepared by Currency Exchange International for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Currency Exchange International, its affiliates or any of their employees incur any responsibility. Neither Currency Exchange International nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Currency Exchange International products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Currency Exchange International.

 

 

 

 

 

Archive