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FX Market Overview, April 26 – Everything You Need to Know on Friday


Forex Market Overview

Stock Markets Bears a Mixed Day

Financial markets encountered a mixed day yesterday with no real stand out movements across the global stock indices. Earnings season extended, and results have become more diverse as the week has progressed.

During the US session, we saw substantial numbers from both Microsoft, and Facebook which supported the Nasdaq move higher but for poor numbers and forecasts from 3M and UPS weighed on the S&P 500.

Dollar Keeps the Bullish Momentum

The US dollar extended to pound higher with the Dxy breaking through 98.00 and hitting levels not seen for nearly two years. On Friday, the dollar held constant near a two-year high against its rivals, supported by data showing firm US capital goods orders. Whereas, the advance GDP report is due to be released later in the global day could further reinforce bullishness.

Commodities Supported Despite Risk On Sentiment

In the commodities area, Oil drifted back off of recent highs although remains bullish, and Gold managed to bounce back off of lows sub 1270 earlier in the week to trade back up towards 1280 this morning.

Quick Update on Forex

The forex market has been trading at five-year lows in volatility terms over the last few weeks. As discussed above the greenback is now making fresh highs.

Market dynamics are merely shifting all the time, and despite a considerably more dovish Fed, the greenback remains engaging as other major central banks have followed quickly on the Fed’s feet.

The dollar will remain bid in this situation while economic figures look more positive from the US, particularly about the EU and tonight’s US GDP releases could be significant from a technical point of view. If we see a healthy number, then this should drive the dollar into more notable highs against the basket and will presumably see the Euro targeting the crucial psychological level of 1.1000.

The kiwi market has been a focus already this morning in Asia with the currency gaining nearly 1% from yesterday’s lows. At first, we heard from RBNZ Governor Orr that they are not particularly concerned with recent weaker GDP data and then had a better than expected Trade Balance print.

What’s Next?

Looking at the rest of today’s trading sessions and there’s little in the way of economic data releases due in both the Asian and London sessions.

The SNB Governor Thomas Jordan is due to speak in Bern close to the European open and Swiss traders will be giving close attention to what he has got to say particularly given fresh moves in the currency.

The main focus of the day will be that US GDP number which is due for release early in the New York session. The initial release of the US GDP tends to produce the broadest surprise and therefore the most critical market impact.

The United States economy grew at an annualised pace of 2.2% in this autumn 2018, beating different developed economies. The first quarter of 2019 doubtless saw slower growth, partially because of the govt closedown. However what proportion did the economy slow down? Note that expectations might shift within the second because of the durable goods report.

That’s all for now. See you soon with another update.


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