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All Eyes on the ECB’s September Policy Meeting

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USD

On Thursday: The Greenback drifted higher vs. a basket of major currencies, as the previous session's upbeat U.S. service sector data continued to support, despite sagging Treasury yields tempered the dollar's gains.  Meanwhile, Wednesday's data showed the U.S. Non-manufacturing economic activity that came in at 59.8 last month – the highest reading since August 2005, which provides more evidence that the recent string of hurricanes are unlikely to have a significant impact on third quarter growth. In addition, the U.S. private sector added 135k jobs in September, beating  expectations.

On the release front, traders are awaiting the U.S. Factory Orders for August, which are  expected to hit 0.9% from -3.3%.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose as much as 0.01% to settle at 93.465.

GBP

The sterling failed to maintain its brief gains as Theresa May’s speech to the Conservatives gave support the market’s confidence in the Pound Sterling. The Prime Minister reassured the Tories she was willing to crash out of the EU without a Brexit deal if necessary. GBP/USD edged down 0.13% to trade at 1.3226.

EUR

The single currency rose as much as 0.08%, to settle at $ 1.1770 as traders are waiting minutes of the European Central Bank’s September policy meeting to gauge what was discussed about the currency.

JPY

The Greenback initially declined vs. the Japanese yen during yesterday’s trading session, but recovered this morning on a strong U.S. data.  However, the cautious environment around Asian equity market continue to support Japanese Yen’s safe-haven. USD/JPY fell as much as 0.05%, to settle at ¥112.69. Moving ahead, markets are awaiting coincident indices August, due to release tomorrow, which is expected to hit 117.5 from 115.7. As no other reports lined up from Japan, the currency may be subject to market movement.

Gold

Gold prices were little changed as the Greenback settled high, positively affected by strong US services sector data, with markets awaiting Friday’s Non-farm Payrolls for September. Gold Futures - Dec 17 rose as much as 0.04%, to settle at 1,277.25.

Oil

Earlier today, oil prices amid expectations that Russia and Saudi Arabia could extend production cuts, despite the fact that the U.S. exports fell on the market.

On the release front, the Energy Information Administration (EIA) said late on Wednesday that domestic crude supplies declined by 6 million barrels for the week ended Sept. 29.

Brent crude futures (LCOc1), the international benchmark for oil prices, fell as much as 0.5%, to settle at 55.77, while Crude Oil WTI Futures - Nov 17 fell as much as 0.12%, to settle at $49.92.

Economic Calendar (all times in GMT)

  • EUR ECB account of the monetary policy meeting: (GMT 11:30) – Important.
  • USD Trade Balance (AUG): (GMT 12:30) – Medium – Forecast (-$42.7b) – Previous (-$43.7b).
  • USD Durable Goods Orders (AUG F): (GMT 14:00) – Medium – Forecast (1.7%) – Previous (1.7%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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