Dollar holds near 10-week high as global sentiment remains fragile
The dollar edged higher against a basket of its key rivals on Monday, not far off a 10-week high hit after data showed U.S. economic growth slowed less than expected and as global risk sentiment remained fragile.
The U.S. currency has found support recently on safe-haven buying as investor demand for riskier assets waned on steep declines in world equity markets on worries over corporate earnings, geopolitical uncertainty and global growth.
“The development in the U.S. equity market is the main focus in the foreign exchange market,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
On Monday, the dollar index, which measures the greenback’s performance against a basket of six major currencies, gained 0.1 percent to 96.446. The index has advanced 1.4 percent this month.
On Friday, it rose as high as 96.860, its best level since Aug. 15, after data showed the U.S. economy slowed less than expected in the third quarter. But it later turned and ended 0.3 percent lower on the day.
GBP/USD price forecast – GBP/USD range bound Ahead of UK budget speech & US personal spending data
The GBP/USD is trading softly up in early Monday trading, testing the waters near 1.2830 ahead of a tense day that sees the latest annual budget speech from the UK’s Chancellor of the Exchequer. The pair has maintained a range bound performance since trading session opened for the day with both USD and GBP trying to gain the upper hand. As of writing this article, the GBPUSD pair is trading near flat at 1.2834 up by 0.02% on the day. GBP has upper hand against USD despite risk averse market as t he UK’s Chancellor of the Exchequer, Phillip Hammond commented during this speech yesterday that the UK would be capable of taking whatever fiscal measures were necessary to protect the UK’s domestic economy in the event of a no-deal Brexit, though the Bank of England (BoE) may be forced by circumstances to make further changes to interest rates.
Budget Updates Remain Main Focus of Sterling Investors
Monday is slated to see the latest Annual Budget from the Exchequer Chancellor Phillip Hammond, and the chancellor is expected to unveil key details from the UK’s budgetary outlook, somewhere around 15:30 GMT, and traders are tensing ahead of the report in case Hammond plays too many safe cards and focuses too much on the possibility of further extending the UK’s austerity measures, as well as planned funding solutions in the face of a potential no-deal Brexit. On the release front aside from budget updates , UK’s calendar will see release of UK Mortgage Approvals at 09:30 GMT, expected to decline from the previous reading of 66.44 thousand to 64.75 thousand, but the headier reading for the day will be the US Consumption Expenditure reading at 12:30 GMT, which is expected to clock in at 2%, in-line with the previous figure, for the year into September.
US calendar also sees the release of Core PCE price index and Personal spending data updates during today’s market hours. Downside pressure can be expected to mount for the Cable as the pair continues to see broad-based decline against a framework of continued Brexit-bearish headlines. When looking from technical perspective, The technical oscillators including Momentum and the Relative Strength Index both turned higher in the neutral territory on a daily chart. The Slow Stochastics made a move deeply into the bullish territory with swing upwards being the most probable move. However if the pair falls below 1.2800 handle, the pressure on falling further towards 2018 low of 1.2662 will mount higher.
Stock Market News
Strong earnings haven’t cured the stock market’s blues
Investors are selling the shares of firms that hit quarterly earnings expectations at the highest rate since 2011, a sign of concern over how long the good times can last for American corporations.
Led by the likes of Amazon.com Inc., U.S. companies are on pace to extend a streak of double-digit earnings gains this quarter. The abundance has been widely shared, with energy conglomerates, manufacturers and technology concerns alike posting large increases.
Yet this robust corporate performance has been largely overshadowed by a monthlong market retreat that has shaved trillions of dollars off the value of major U.S. stock indexes. Among the firms hit have been those that posted earnings that matched or exceeded Wall Street estimates, often while offering soft sales results or mixed guidance for future periods.
It’s a development that many analysts and portfolio managers take as signaling that confidence in future earnings is on the wane. Investors are pulling back from the highest-priced stocks as they weigh factors including rising labor and financing costs, questions about the continued longevity of a nine-year-old U.S. economic expansion and concerns that the financial boost from the 2017 tax cut will soon be behind many firms.
That sort of uncertainty was largely suppressed over the first part of 2018 as firms earned outsize profits and U.S. economic growth picked up, but many investors are now reassessing the outlook in earnest as earnings reports roll in.
U.S. equity index futures start weekly trading little changed
U.S. equity index futures were little changed at the start of weekly trading on Sunday, leaving it unclear whether Wall Street would rebound from last week’s steep sell-off or extend the slide.
S&P 500 e-mini futures were 0.09 percent lower by 6:11 p.m. after the open of weekly trading. Nasdaq 100 Index e-mini futures (NQc1) were higher by 0.05 percent.
The S&P 500 ended at its lowest level since early May on Friday and flirted with correction territory after technology and internet shares sold off further, capping another volatile week for U.S. stocks.
During Friday’s session, the benchmark S&P 500 fell more than 10 percent from its Sept. 20 record closing high, but pared losses to end above that level. A finish of 10 percent or more below its all-time closing high would confirm a correction.
The Nasdaq registered its biggest weekly drop since March 23 after confirming a correction earlier in the week.
Grim results late on Thursday from Amazon.com Inc (O:AMZN) and Alphabet Inc (O:GOOGL), two stocks that have helped power the equity markets’ decade-long bull run, sparked the day’s sell-off and overshadowed data showing the U.S. economy growing at a healthy clip.
Bitcoin Cash Daily Analysis
Bitcoin Cash gained 0.59% on Sunday, partially reversing Saturday’s 0.90% fall to end the week down 2.94% at $442.8, with Sunday’s gain only the second of the week, the first being Monday’s 0.07% rise.
Range bound by historical standards, a morning high $442.5 failed to gather momentum, with Bitcoin Cash pulling back to a late in the day intraday low $438.1 before a late rally to an intraday high $443.4. The moves through the day left the day’s major support and resistance levels left untested, with the highlight of the day being Bitcoin Cash’s recovery to $440 levels.
At the time of writing, Bitcoin Cash was down 0.34% to $441.1, with Bitcoin Cash pulling back from an early morning high $443.2 to a morning low $440.3 before steadying, the early moves leaving the day’s major support and resistance levels untested.
For the day ahead, a hold on to $441 levels would support a run at the morning high to bring the day’s first major resistance level at $444.7 into play before any pullback, with the second major resistance level at $446.7 unlikely to be tested through the day.
Failure to hold on to $441 levels through the morning could see Bitcoin Cash pullback through the morning low $440.3 to test the day’s first major support level at $439.4, while the second major support level at $436.1 will likely be left untested barring materially negative news hitting the wires.
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