USD posts a strong week amid equity weakness
Gary Christie October 30, 2020 8:34 PM
SPX closes down 5.64% WoW, EUR and CAD post the largest moves against the USD
The US Dollar was bullish against most of its major pairs on Friday with the exception of the GBP. On Monday, Markit's US Manufacturing Purchasing Managers' Index for the October final reading is expected to remain at 53.3 on month, in line with the October preliminary reading. Finally, Construction Spending for September is expected to rise 0.9% on month, compared to +1.4% in August.
The Euro was bearish against all of its major pairs. In Europe, the European Commission has posted Eurozone's 3Q GDP at -4.3% (vs -8.0% on month expected), October CPI at +0.2% (vs +0.2% on month expected) and September jobless rate at 8.3% (vs 8.2% expected). The German Federal Statistical Office has released 3Q GDP at +8.2% (vs +7.2% on quarter expected) and September retail sales at -2.2% (vs -0.6% on month expected). France's INSEE has reported 3Q GDP at +18.2% (vs +15.1% on quarter expected) and October CPI at -0.1% (vs +0.2% on month expected). In the U.K., the Nationwide Building Society has posted its House Price Index for October at (vs +0.4% on month expected).
The Australian dollar was bullish against most of its major pairs with the exception of the GBP.
On last week's U.S. economic data front:
Personal Income rose 0.9% on month in September (+0.4% expected), compared to a revised -2.5% in August. Personal Spending increased 1.4% on month in September (+1.0% expected), compared to +1.0% August.
Market News International's Chicago Business Barometer slipped to 61.1 on month in October (58.0 expected), from 62.4 in September.
The University of Michigan's Consumer Sentiment Index advanced to 81.8 on month in the October final reading (81.2 expected), from 81.2 the October preliminary reading.
Initial Jobless Claims fell to 751K for the week ending October 24th (770K expected), from a revised 791K in the week before. Continuing Claims declined to 7,756K for the week ending October 17th (7,775K expected), from a revised 8,465K in the prior week. GDP surged to +33.1% on quarter for the third quarter advanced reading (+32.0% expected), from -31.4% in the second quarter third reading, marking an all-time high.
Pending Home Sales slipped 2.2% on month in September (+2.9% expected), compared to +8.8% in August. The Mortgage Bankers Association's Mortgage Applications rose 1.7% for the week ending October 23rd, compared to -0.6% in the previous week. New Home Sales unexpectedly fell to 959K on month in September (1,025K expected), from a revised 994K in August.
Wholesale Inventories fell 0.1% on month in the September preliminary reading (+0.4% expected), compared to a revised +0.3% in the August final reading. Durable Goods Orders jumped 1.9% on month in the September preliminary reading (+0.5% expected), compared to a revised +0.4% in the August final reading.
Finally, The Conference Board's Consumer Confidence Index unexpectedly declined to 100.9 on month in October (102.0 expected), from a revised 101.3 in September.
This week's biggest moving major pairs were the EUR/USD which closed down 210 pips and the USD/CAD which gained 199 pips.
Looking at the EUR/USD, the pair remains in a holding pattern between 1.202 resistance and 1.1605 support with a bias to the upside.
Source: GAIN Capital, TradingView
The USD/CAD also remains in a consolidation zone between 1.342 resistance and 1.30 support. The bias is to resume the prior trend lower if a break below 1.30 takes place.
Source: GAIN Capital, TradingView
Have a great weekend.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.