| |
|
Citizens Foreign Exchange: Your Foreign FiX for Friday, September 20 |
| |
|
|
| |
| Trading Desk Direct: 888.821.3600 |
| |
|
| |
Your Foreign FiX
Friday, September 20, 2019 |
| |
| After a busy week that included several central bank rate decisions, the market turns to the impending quarter-end. For the fourth day in a row, the Fed added US Dollar liquidity to the market to prevent a spike in overnight interest rates. Historically, quarter-end turns see greater demand for Dollar funding and higher shorter-end dollar rates, that provide a boost to US Dollar strength. That boost is lifting the Dollar to the highs of the week despite the Fed's 25 bps cut on Wednesday. The Bloomberg Dollar Spot Index is trading just below the 1,210 level, up marginally from yesterday but up 28 bps from one week ago. The market is pricing a 95% chance for another Fed 25 bps cut by the end of the year. | |
| Canada: The Canadian Dollar weakened after the country's July retail sales data was lower than expected at 0.4% MoM compared to the anticipated 0.6% MoM increase, while Auto Sales declined -0.1%. USDCAD is 20 bps higher to the -1.3300s, on pace for a weekly gain, as oil rises amid concerns about Saudi Arabia’s ability to ramp up production after the recent attack on its industry. WTI crude oil advanced to $58.74 from yesterday’s $58.13. The short-term target for bulls would be an intraday high of 1.3293 in response to the data; pair was +0.1% to ~1.3270 pre-data. Everything being equal, it is likely that the US Dollar will maintain the ascending channel today. | |
| China: The Chinese Yuan has so far strengthened by 0.88% for CNY and 1.03% for CNH in September after an extended selloff caused the currency to depreciate by 3.95% and 3.00%, respectively, in August. The major driver for this recovery has been an easing of trade war tensions between the U.S. and China, such as China's move to exempted soybeans from tariffs last week. September’s one-year Loan Prime Rate (LPR) was reported by the PBOC at 4.2%, down slightly from 4.25% in August. The five-year LPR, which is normally used in longer-term credit like mortgage loans, was kept unchanged at 4.85%. China’s growth and economic data continues to slow and it’s anticipated that more easing will be needed. USD/CNY is currently trading around 7.09 and, should trade negotiations between the U.S. and China progress in a positive manner, the USD/CNY rate should move toward or below 7.00 in the medium-term. | |
| Europe: Despite attempting several times to get back to positive for the week, EUR/USD remains down 40bps amid very thin volumes. The pair has been gravitating towards 1.1050 over the last few sessions, but has been otherwise directionless as data has offered few surprises. Implied volatility is again illustrating this neutral sentiment as 1-year levels have dropped 0.85% in September alone, and are sitting at their 5-year lows of 5.80%. Next week is somewhat light from a macroeconomic perspective, so it doesn’t appear the market will drift from the sidelines anytime soon. Technical resistance sits firmly at 1.1110, which is where both the 50-day moving average and 2019 Fibonacci retracement levels show up, while support remains at the year’s lows of 1.0970. |
|
|
 |
|
| |
Percentage Change |
| |
1M |
3M |
6M |
9M |
12M |
24M |
USDCAD |
0.05% |
1.49% |
-0.70% |
0.17% |
1.42% |
4.13% |
USDCNH |
-0.60% |
3.21% |
5.61% |
4.86% |
2.22% |
6.81% |
EURUSD |
-1.09% |
-3.09% |
-1.73% |
-3.90% |
-4.27% |
-6.51% |
|
| |
Annualized Forward Differential |
| |
1M |
3M |
6M |
9M |
12M |
24M |
USDCAD |
0.75% |
0.54% |
0.67% |
0.30% |
0.21% |
0.07% |
USDCNH |
1.06% |
1.02% |
1.45% |
0.90% |
0.89% |
0.98% |
EURUSD |
2.81% |
2.62% |
3.95% |
2.54% |
2.47% |
2.30% |
|
| |
Implied Volatilty |
| |
3M |
6M |
9M |
12M |
24M |
6M-RR |
USDCAD |
5.39% |
5.52% |
5.73% |
5.89% |
6.21% |
0.53% |
USDCNH |
5.96% |
5.95% |
5.99% |
6.06% |
6.25% |
1.26% |
EURUSD |
5.39% |
5.53% |
5.69% |
5.85% |
6.11% |
-0.05% |
|
|
| Loonie weaker on Retail miss |  | | USD/CAD jumps to 1.3300 handle | | | EUR/USD Implied Volatility Back to 5yr Lows |  | | The market is without direction here as September has completely reversed August's volatility gains |
|
| Read our technical documentation to learn more about this data. |
|
|
|
| Questions, or thinking of trading? Contact the Foreign Exchange Trading Desk direct at 888.821.3600. |
|
|
|
|
| Get just the daily FiX information you want – set your preferences |
|
 |
Subscribe
to the Citizens Daily Foreign FiX email. |
|
|
|
Send us an email with a comment or question about the Citizens Daily FiX email. |
|
|
|
|
|
|
|
|
This document has been prepared for discussion and informational purposes only by Citizens Bank, N.A.
(Citizens). In the preparation of this document, Citizens has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Citizens makes no representation or warranty (expressed or implied) of any nature, nor does it accept any responsibility or liability of any kind, with respect to the accuracy or completeness of the information in this document. The information in this document is subject to change without notice and Citizens does not undertake a duty or responsibility to update these materials.
Citizens is not acting as an advisor or fiduciary in any respect in connection with providing this information, and no information or material contained herein is to be relied upon for the purpose of making or communicating investment or other decisions nor construed as either projections or predictions. In no event should the information be considered recommendations to enter into transactions. Citizens and its affiliates, connected companies, employees or clients may have an interest in the financial instruments mentioned in this document.
To ensure that you receive our emails, please add mail@citizenscommercial.com to your address book.
Privacy and Security:
Please do not reply to this email. For inquiries kindly call 877.550.5933. Keeping your financial information secure is one of our most important
responsibilities. We will never ask you to send sensitive information via email or via a link in an email. If you receive a suspicious email claiming to
be from Citizens Commercial Banking please forward it to: abuse@citizensbank.com. For
an explanation of how we manage customer information, please read our Privacy Notice.
To opt-out of future promotional emails, please click here.
Citizens Bank | One Citizens Plaza | Providence, RI 02903
©2024 Citizens Financial Group, Inc. All rights reserved. Banking products and services are offered by
Citizens Bank, N.A. Member FDIC. Securities products and services are offered through Citizens Capital
Markets, Inc., Member FINRA, SIPC. Citizens Bank & Citizens Commercial Banking are
brand names of Citizens Bank, N.A. Citizens Capital Markets is a brand name of Citizens Financial Group, Inc.
|
|
 |
 |
 |
