JPY Outperforms, CHF Drops to Parity, GBP Volatility is Coming - US Market Open

MARKET DEVELOPMENT – JPY Outperforms, CHF Drops to Parity, GBP Volatility Coming

DailyFX 2019 FX Trading Forecasts

Swiss Franc returns to parity against the greenback, a level not seen since June as the currency faces its largest daily drop since July 1st. SNB’s Maechler continued to highlight the need and importance of expansive monetary policy in the face of continued weaker global growth backdrop, while also reiterating that the SNB is willing to intevene in FX markets. The need to keep monetary policy expansive had been reaffirmed amid the lower than expected inflation readings.

Japanese Yen outperforms in the G10 complex as yesterday’s weak ISM manufacturing PMI raises concerns that not even the US has managed to escape from the global manufacturing recession. That said, eyes will be on tomorrow’s non-ISM manufacturing PMI to get a sense whether the weakness is broad based.

Sterling headline sentivity is notably elevated as market participants await the details of Boris Johnson’s Brexit plan. Alongside this, the direction of the currency in the short-term will also be dictated my the EU’s and UK opposition parties reaction to the plan, given that this would provide a clear signal as to whether it would pass. Nonetheless, the Pound will likely remain volatile. Of note, UK PM Johnson and EU’s Juncker is scheduled to talk from 16:15BST.

WHAT’S DRIVING MARKETS TODAY

1. “USD/CAD Price Struggling With Moving-Average Resistance” by Nick Cawley, Market Analyst
2. “Gold Price Technical Outlook - Pullback Over?” by Paul Robinson, Currency Strategist
3. “GBP Technical Analysis Overview: GBP/USD, EUR/GBP” by Justin McQueen, Market Analyst
4. “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX