06.11.2019: USD flat amid subdued trade (USDX, JPY, USD, AUD)

06.11.2019: USD flat amid subdued trade (USDX, JPY, USD, AUD)


In the Asian session, traders were discouraged by uncertainty over the first phase of a trade deal between Washington and Beijing. Risk aversion seems to be back in the market as many investors are casting doubts on the success of US-China trade negotiations. The yields of US Treasuries moved lower again. The US dollar moved away from multi-day highs amid a decline in US Treasuries. Recently, US bond yields rose after the release of positive data on the US service sector. Trade-related optimism also supported the greenback. Still, the US dollar was unable to rally due to the lack of further news on US-China trade negotiations. It entered the consolidation phase failing to break the psychological level at 98.00. The dollar/yen is flirting with the level of 109. Yesterday the pair declined to 109.20 even despite the weak data on Japan Services PMI and the Bank of Japan’s dovish rhetoric. Overall, the pair is hesitating to choose a trajectory due to the lack of news on the US-China trade talks. There are only rumors circulating in the market. For instance, yesterday Beijing allegedly demanded to cancel a tariff hike introduced in September. However, today Washington is asking for additional measures from the Chinese government in terms of intellectual property protection and a clear plan for the purchases of American agricultural products. Against this background, the AUD/USD pair is trapped in a narrow range despite the rising yields of Australian bonds. In the Asian session, it is trading almost unchanged between 0.6890 and 0.6900. Final composite Purchasing Managers’ survey and retail sales data from the euro area are due today. What is more, some ECB officials are scheduled to deliver a speech as well as some representatives of the Federal Reserve. Overall the economic calendar lacks any significant macroeconomic reports, except macroeconomic data from the Ministry of Energy on oil reserves. US-China trade deal and Brexit will remain the marker drivers.

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