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Forex Daily Recap – Loonie Bears Took Charge Amid Trade Settlement Uncertainties

Nikhil Khandelwal

GBP/USD

The Cable opened up around 1.2789 levels and took a massive plunge reaching near 1.2740 levels. Today, the GBP/USD pair stood at the three months lowest point near 1.12733 levels.

As there were hardly any GBP specific events to move the Cable, the pair entirely relied upon the USD economic fundamentals and Brexit updates. The Brexit deal remained stalled, as the six weeks, Cross-party talks showed lack of progress. However, the parties plan straightaway to have a consensus to finalize a proper deal. Meanwhile, UK PM Theresa May would attempt for the fourth time in the first week of June. May proclaimed that she might step down if the MPs support her deal. This news adds more pessimism around the pair as electing a new leader would further delay the Brexit process.

GBPUSD 60 Min 17 May 2019

The elevating US Dollar Index forced the Cable to dig downwards further. On Friday, the heroic performance of the US Dollar was the main driver behind the pair’s continuous downward move. The Dollar was at its two-year high and was hovering near 97.98 top levels. This positive sentiment around the Index was on the back of Thursday’s bullish US data.

EUR/USD

During the European trading session, the Euro pair had touched the 10-days low near the 1.1157 levels. The Fiber slipped despite sound Euro economic data on Friday. The April Consumer Price Index (CPI) YoY for the Eurozone region appeared in-line with the consensus estimates of 1.7%. The CPI Core computed for the same period reported 0.1% above the market expectation of 1.2%. The Construction Output YoY for March came out 4.5% higher than the estimates of 1.8%. Investors remained quite surprised following the release of the sound Euro events, as the pair went down around 13 pips. Laterwards, Michigan University published its May US Consumer Sentiment Index around 102.4 points than 97.5 points estimates. This positive report strengthened the Greenback and allowed the Fiber to drop near 1.1156 levels. Meantime, Italian threats to break the EU Fiscal norms continued to hurt the EUR/USD pair.

US Dollar Index

The USD Index initially hovered near 97.82 top levels and later got further uplifted. The Greenback recorded the month’s high around 97.94 levels during the day. Today, the American Dollars have remarkably gained over the other six rival currencies. During this week, the Green money had received significant support out of Sound USD-specific economic events. The prominent ones remained the Housing Starts, Building Permits, Jobless Claims, Phil’s Manufacturing and Michigan Consumer Index. Over the US-China Trade war front, there tend to stay no as such concrete conclusions. Today, a piece of news indicated that China might cancel talks with the US. The Chinese counterpart proclaimed that the US lacked sincerity to conclude negotiations. However, the Greenback seemed to stay apathetic to this trade talks update and kept uprising.

USD Index 60 Min 17 May 2019

USD/CAD

The Loonie rose in the early hours over rising crude prices. During today’s session, the Crude WTI Futures had touched fresh weekly highs near $63.63 per barrel. The Middle East Crude Supply tensions had already helped it escalate to $62 per barrel mark. This time, the headlines revealing uncertainties around the US-Sino trade talks made the extra boost in the oil prices. The Chinese Trade Officials stated that the US was showing less sincerity to close the deal to the earlier. The Officials added that the US was using petty tricks to spoil the atmosphere.

Meanwhile, the US market’s action to blacklist Huawei and other Chinese Companies further enraged the Chinese counterpart. Hence, the Loonie bears took charge amid crude upsurge over trade chaos. The USD/CAD pair dropped from day’s high of 1.3513 levels today’s low of 1.3434 levels.

This article was originally posted on FX Empire

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