Citizens Foreign Exchange: Your Foreign FiX for Friday, August 16
 
Citizens Commercial Banking logo Citizens Commercial Banking logo
Citizens Global Markets
Foreign Exchange
Citizens Commercial Banking logo
 
Trading Desk Direct: 888.821.3600     
 
 
Your Foreign FiX
Friday, August 16, 2019
 
The US Dollar is making new highs for the year this morning amid news that the ECB is reading a massive stimulus package that should include substantial and sufficient bond purchases as well as cuts to the bank’s key interest rate.  The EUR is trading lower against the US Dollar, dropping 30 bps today and making a new low for the year.  Additionally, the entire EUR swap curve now trades in negative yields.   US interest rates are trading slightly higher, after making new cycle lows yesterday.  The market is pricing a 28% chance for a 50 bps cut at the September meeting, ahead of the Jackson Hole symposium next week.  The Bloomberg Dollar Spot Index is trading just above the 1,209 level, up 9 bps from yesterday’s close and up 55 bps from one week ago.   As the trade war drags on, the weakness in the global macro economy continues to be a tailwind for USD.
Canada: USDCAD starts the session holding steady around the 1.3300 figure to trade near its 100-DMA (1.3299). Overall the loonie is up against its peers, save for the British pound, on the back of slightly stronger oil and easing of global trade concerns. With another light day of economics, traders are expecting a quiet session.  The loonie will continue to be driven by the oil market and trade news. Support comes in today at 1.3196 then 1.3184 (50-DMA). Resistance comes in at 1.3310 (200-DMA) then 1.3345.
China: Continuing yesterday’s rally, USD/China consolidated around the 7.04 handle overnight as optimism in trade negotiations and a delay in additional US tariffs prevent the pairs from lifting higher for now.  A lack of macroeconomic indicator data overnight also helped keep the pairs in line with bearish news in the beginning of the week, which appears to be mostly digested by market participants.  US equity markets are slated to rally to finish off the week and could drive broad USD strength to pull CNH weaker.  However, weak housing start data could weigh on the pair and allow to Chinese currencies to net gain against the US Dollar for the first time in three weeks.
Europe: The Euro moves to trade 30 bps weaker this morning as a week of economic softness weighs on Europe’s common currency.  Today’s decline can be attributed to yesterday's report that the ECB is considering a stimulus package that should include substantial bond purchases and rate cuts to already negative rates.  The entire EUR swap curve now trades in negative yields.  Mixed overnight economic data releases may have also provided some momentum to the EURUSD pair in the London open, as PPI met expectations to contract by 2.1% YoY in July from 2.5% YoY in June while the trade balance shrunk below expectations.  The Eurozone’s CPI also decreased in July by 0.5% MoM, although it increased to 1.1% YoY on an annualized basis while Core CPI increased above the ECB’s 2% target to 2.2%. Today marks the currency’s fourth day of EURUSD decline as the currency pair looks to close the week 1.15% lower since Monday, its largest one week loss in six weeks.  Downward pressure emerged earlier this week amid yield curve inversion in the United States and Germany’s 0.1% economic contraction in Q2—the country’s first since the financial crisis. Next week, market participants will look ahead to July Inflation and August PMI and consumer confidence data.  EUR trades at its lowest level since August 1st as the currency remains below the 1.11 handle.  
 
 
Percentage Change
 
1M
3M
6M
9M
12M
24M
USDCAD
1.81%
-1.06%
-0.02%
-0.20%
1.99%
6.63%
USDCNH
2.41%
1.92%
5.00%
2.39%
2.54%
7.32%
EURUSD
-1.30%
-1.14%
-2.55%
-2.67%
-4.73%
-6.30%
 
 
Annualized Forward Differential
 
1M
3M
6M
9M
12M
24M
USDCAD
0.69%
0.52%
0.65%
0.32%
0.25%
0.11%
USDCNH
0.97%
0.91%
1.26%
0.80%
0.78%
0.99%
EURUSD
2.89%
2.74%
4.05%
2.56%
2.48%
2.29%
 
 
Implied Volatilty
 
3M
6M
9M
12M
24M
6M-RR
USDCAD
5.85%
5.92%
6.06%
6.14%
6.43%
0.57%
USDCNH
6.12%
5.98%
5.94%
5.91%
6.09%
1.23%
EURUSD
6.74%
6.63%
6.68%
6.78%
7.11%
-0.22%
USDCAD looking range-bound
USDCAD vs Oil
EUR/USD Continues Lower
EUR/USD weaker by 1.15% this week
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.
Share with a colleague.  
Download as PDF  
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

©2019 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.