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
Bullish
GBP/USD
Bullish
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
USD/JPY
Bullish
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
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bullish
More View more
Real Time News
  • The Singapore Dollar is driven by the Monetary Authority of Singapore, which manages exchange rate instead of short-term interest rates. Learn more on the $SGD and how to trade it. Get your update from @ddubrovskyFX here: https://t.co/eWLM9XZs5Y https://t.co/OWuwGML4Ch
  • RT @FT: Huawei admits that US sanctions are hurting https://t.co/GIT4XSfszx
  • RT @WSJecon: Mexico’s inflation eased in September, coming in line with the Bank of Mexico’s 3% target for the first time in three years ht…
  • My phone's decided to give up the ghost and I've been phoneless for 24 hours. Not coincidentally, I've been a machine tackling errands around the house. What a time to be alive.
  • #Gold remains stuck in a range as a range of conflicting forces battle and fail to take control of price action. Get your $gld market update from @nickcawley1 here: https://t.co/pw7UjkUyqH $XAUUSD https://t.co/YD8L6knjhe
  • Geopolitical developments send oil prices soaring or falling. Get your market update here: https://t.co/0znHZPvPON https://t.co/s358dvMBeR
  • Currency markets may be battered by breakneck volatility if a slowdown in global economic growth triggers a collapse in the fragile market for collateralized loan obligations (CLOs). Get your market update from @ZabelinDimitri here:https://t.co/KfjjtaXs7b https://t.co/sWeSlv33pb
  • The #Dow Jones and #Nasdaq 100 will await key earnings from some of the world’s largest manufacturers and tech companies while the #DAX grapples with freshly-imposed tariffs. Get your equities market update from @PeterHanksFX Here: https://t.co/u2lG19JFt3 https://t.co/OHs4rQEH7T
  • Crude #oil prices are consolidating above a key support zone we’ve been tracking for more-than three months now. Get your market update from @MBForex here: https://t.co/XaACvEpLG4 #OOTT https://t.co/XjmjUt4Par
  • Why trade with Bollinger Bands®? Find out as a day trader, how you can use it to your advantage:https://t.co/dwODDDSsFi @WVenketas https://t.co/SYduJ5k9mL
EURUSD May Fall on US Retail, Sentiment Data. GBP Eyeing Carney

EURUSD May Fall on US Retail, Sentiment Data. GBP Eyeing Carney

2019-06-14 06:30:00
Dimitri Zabelin, Junior Currency Analyst
Share:

TALKING POINTS – EURUSD FORECAST, US ECONOMIC DATA, GBPUSD, MARKEY CARNEY, BOE

  • Growing risk aversion putting premium on liquidity, fueling demand for USD
  • Even if US econ data underperforms, demand for haven may buoy Greenback
  • GBP will be watching Bank of England Governor Mark Carney’s commentary

See our free guide to learn how to use economic news in your trading strategy!

APAC RECAP

Asia Pacific markets found themselves shaken after a series risk-aversion-inducing catalysts crossed the wires within a relatively short time frame. New Zealand PMI data showed a significantly smaller expansion compared to April and sent NZDUSD lower which was later followed by a decline in AUDUSD and Australian government bond yields. The latter appears to have come as a result of increased speculation of another rate cut by the RBA.

GROWING RISK AVERSION FUELING DEMAND FOR LIQUIDITY OVER RETURN?

Growing risk aversion in financial markets may distort typical reactions FX markets have to data releases. In the US, retail sales and sentiment data may push EURUSD higher if both publications show a weaker reading. An underperformance in the data would not be surprising considering that the recent publication of CPI showed that momentum for price growth is slowing.

In times of risk aversion, investors typically put a premium on liquidity over returns and frequently flock to anti-risk assets like the US Dollar and Treasuries. In this case, if economic data shows weakness, it will reinforce the narrative of the doves that looser credit conditions are becoming increasingly necessary. Usually, this would result in a weaker Greenback and lead to an exodus of capital in USD as we’ve seen recently seen.

However, since the economic circumstances appear more dire now relative to before, a dovish shift in the Fed may not actually result in a weaker Dollar. This is because market participants may question why the central bank is cutting rates. The inevitable conclusion is that prevailing economic conditions are bad enough that policymakers felt compelled to lower interest rates. In times of crisis, where do investors typically flock?

To haven assets! The quintessential one of which is the US Dollar.

Meanwhile, GBP will be closely watching Bank of England Governor Mark Carney’s speech in London. If any messages within the commentary allude to a deterioration in the economic outlook, it could amplify the effect of risk aversion and cause even more capital to fly into the arms of the US Dollar. GBPUSD may find itself under additional pressure as the race for Prime Minister in the UK continues.

CHART OF THE DAY: NZDUSD, AUDUSD, AUSTRALIAN BOND YIELDS SUFFER

Chart Showing NZDUSD, AUDUSD

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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

DISCLOSURES

News & Analysis at your fingertips.