FX Traders Outlook – FXWW Chatroom

Focus is back on China again following yesterday’s stock index declined 6.13%. Shanghai composite index opened lower at -2.7%; pressured AudUsd to 0.7326. Reports are similar, Aussie bids from local corporate names all the way to 0.7300. Into late morning, Shanghai Composite extended losses and took Aud to 0.7314. 

This morning MNI ran story that outgoing Bank of England MPC member David Miles, whose always been a hawk, that time for the first rate hike is approaching, but also said it is not yet time for tightening. He said he expects rate hikes to be limited and gradual. Miles will leave the committee at end of Aug. Gbp rather unchanged on those remarks but EurGbp was 5 pips lower. Offers in GbpUsd are found above 1.5720 from various names and Asian bids below 1.5600. 

I struggled to pen something on Euro – to make it seemed exciting. EurGbp moved lower on that Miles’ comment on UK rate hike. At the same time, EurUsd got to 1.1022. Since then, EurUsd climbed higher – no one knows why. I hear some orders above 1.1055 and better offers start from 1.1125. Downside, bids linked to gamma play 1.0950-75 (there is a 1.0950 strike worth Eur1.5bn expiring tomorrow NY cut). Good buying further down below 1.0850. 

UsdCad bids are starting to build below 1.3040 and grows towards figure. Oil price having a big impact overnight – our Cad strategist Bipan said there is topside exhaustion but we still continue to wait for better levels to get long. Our trader Sam sticks to his long UsdCad view short term stop at 1.2990 and longer term under 1.2940. Rates perspective, yield of 2-year UST vs 2-year CAD bonds indicating spot should be in the 1.3130’s. 

USDCNH started the day at 6.4420 and retreated into 6.43-handle. We sold a round of US dollars for Chinese name and ran into bids at 6.4370. Weak stock market and USDCNH revisited 6.44-handle. Chinese banks returned to sell USDCNH and took out the 6.4370 bid. 
View further market information in the FXWW Chatroom with a free trial.

Leave a Reply

Your email address will not be published.