We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • What are a few of the common trading mistakes made by traders? Find out from @WVenketas here: https://t.co/Q3sPmP2rya #tradingstyle https://t.co/sSU5q2ObQm
  • Missed today's Cross-Market Weekly Outlook webinar? See the recording here: https://t.co/d1rb3hCZTH We discussed: - US-China #trade deal - #Brexit outlook after the UK general election - US #Dollar outlook going into 2020
  • European Opening Calls From IG: #FTSE 7392 +0.53% #DAX 13346 +0.48% #CAC 5955 +0.60% #AEX 607 +0.74% #MIB 23509 +0.77% #IBEX 9622 +0.61% #STOXX 3754 +0.61%
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/IbzSBk5Hb1
  • Join @DavidCottleFX 's #webinar at 3:00 AM ET/8:00 AM GMT for your weekly update on the top Asia Pacific market drivers that traders should watch this week. Register here: https://t.co/HNf3Axw8s5 https://t.co/iMMiza1J1d
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/im72E4Szmi
  • The Riksbank – the world’s oldest central bank - will exit its negative interest rate policy for the first time in known history as officials explore uncharted territory with unknown consequences. https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Worlds-Oldest-Central-Bank-to-Exit-Negative-Rate-Policy-First.html
  • The Indonesian Rupiah, Malaysian Ringgit, Philippine Peso and Singapore Dollar may continue their rise against the US Dollar on global optimism amid a US-China trade deal #ASEAN #IDR #PHP #USD - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Indonesian-Rupiah-Malaysian-Ringgit-May-Rise-on-US-China-Deal.html?CHID=9&QPID=917702 https://t.co/GYaUYookwM
  • LIVE NOW: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
  • LIVE IN 30 MIN: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
Asia Stocks at Risk as Euro Stoxx 50, S&P 500 Tumble. Yen May Gain

Asia Stocks at Risk as Euro Stoxx 50, S&P 500 Tumble. Yen May Gain

2018-11-20 00:30:00
Daniel Dubrovsky, Analyst
Share:

Asia Pacific Market Open – Brexit, British Pound, Swiss Franc, S&P 500, Fed, US Dollar

  • British Pound little changed on Brexit latest as US Dollar weakness worked in its favor
  • S&P 500 selloff amplified after Europe trade by pessimistic US home builder sentiment
  • Asia Pacific benchmark stock indexes may follow Wall Street lower, boosting the Yen

Check out our 4Q forecast for the US Dollar in the DailyFX Trading Guides page

The volatile British Pound managed to brush off Brexit headlines by the end of Monday’s trading session. Earlier in the day, UK Prime Minister Theresa May continued to double down on her Brexit draft. She said that ensuring free-flowing borders with Europe is crucial. This still has her at odds with leavers at a time when her leadership is at risk. The markets reacted by selling Sterling aggressively.

GBP/USD was able to recover as a result of pronounced weakness in the US Dollar during the latter half of the trading session. There, Wall Street ended the day in the red as the S&P 500 plunged about 1.66% to its lowest close this month. At the same time, you had a rally in US government bond prices which reflected investors seeking safety in a ‘risk-off’ trading dynamic.

This risk aversion was preceded by developments out of Europe which sent the Euro Stoxx 50 about 0.64% lower. The catalyst may have been as a result of a plunge in Renault, a major French carmaker, as their stock tumbled about 8.5 percent. Renault’s Chairman, Carlos Ghosn, was arrested for ‘significant acts of misconduct’. As a knock-on effect, the Swiss Franc, a regional haven, appreciated broadly.

In this scenario, the US Dollar can benefit as a result of its highly liquid and world reserve currency status. But, that was not the case. Looking at Fed funds futures, 2019 and December 2018 rate hike bets continued fading. The depreciation in the Dollar picked up pace after the NAHB Housing Market Index, a gauge of home builder sentiment, dropped to 60 in November from 67 expected.

This was not only the lowest outcome since August 2016, but the drop itself was almost by 12 percent. The intensity of the deterioration was by the most in over four years. Not surprisingly, this has come against the backdrop of higher interest rates. This tends to slow demand for housing which is about a 15-18% contribution to GDP according to the National Association of Home Builders (NAHB).

By the end of the day, the anti-risk Japanese Yen finished the day higher against most of its major counterparts. Meanwhile, the pro-risk Australian and New Zealand Dollars fell flat on their faces. There may be more of the same ahead should Asia Pacific benchmark stock indexes track Wall Street lower. Given a lack of key local economic event risk next, risk trends may be the primary driver for financial markets.

US Trading Session

Asia Stocks at Risk as Euro Stoxx 50, S&P 500 Tumble. Yen May Gain

Asia Pacific Trading Session

Asia Stocks at Risk as Euro Stoxx 50, S&P 500 Tumble. Yen May Gain

** All times listed in GMT. See the full economic calendar here

FX Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.