Month End Fixing Follies Ahead

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It is month end and that means FX markets are vulnerable to market hijinks around the 1600 GMT fixing. USDCAD may see some selling due to the 2.25% rise in the DJIA and the 3.81% rise in the Nasdaq Against a 0.35% decline in the TSX.

Overnight, there wasn’t much, if any, evidence that month end portfolio rebalancing flows were a factor. However, China data played a role.   The official Manufacturing PMI data was 51.4 vs. a forecast of 51.6.   AUDUSD came under pressure as a result but the drop from 0.7989 to 0.7958 was reversed on rising copper prices.

The soft China data and a drop in New Zealand Business confidence undermined NZDUSD which drifted lower throughout the European session and opened in New York at the overnight low.

USDJPY traders weren’t happy with the latest North Korea missile test, on the weekend.  Still, USDJPY, stayed within a fairly narrow 110.32-110.75 range

In Europe, Eurozone data was mostly better than expected.  Eurozone core inflation rose 1.2% vs. forecast for a 1.1% gain.  The Unemployment rate dropped and German Retail sales beat the forecasts.  Despite all that, EURUSD traders were channeling Shania Twain and singing “that don’t impress me much.”  EURUSD traded in a 1.1724-1.1761 range and opened in New York near the low.

Sterling suffered a similar fate to the euro.  GBPUSD saw its best level in Asia and drifted steadily lower falling from 1.3149 to 1.3098.  It popped back to 1.3119 in early New York trading.

WTI oil printed $50.00/barrel in Europe and then a wave of selling drove prices down to $49.45 in New York trading.  Prices got an added boost as the growth in the number of US oil rigs appears to be slowing.

USDCAD opened the week with a small bid in Asia and climbed steadily but the rally stalled at 1.2485, That move was due to a bit of profit taking.  Friday’s better than expected GDP data and firm oil prices will keep USDCAD downside in focus.

This morning’s US data includes Chicago Purchasing Managers Index, Pending Home Sales, and the Dallas Fed Manufacturing Business index.  Traders will also be leery of political developments.  Russia expelled 800 US diplomats in retaliation for fresh US sanctions.

Friday’s US and Canadian employment reports should keep the major currencies inside last week’s ranges.

Overnight Ranges

31-Jul-17 Open-6 am EDT High Low
USDCAD 1.2467 1.2485 1.2434
EURUSD 1.1734 1.1761 1.1724
USDJPY 110.55 110.76 110.32
GBPUSD 1.3113 1.3149 1.3098
USDCHF 0.9696 0.9705 0.9665
AUDUSD 0.7974 0.7988 0.7957
NZDUSD 0.7484 0.7520 0.7483
USDMXN 17.7847 17.7890 17.7455
WTI   49.79 50.00 49.60


USDCAD Technical outlook:

The intraday USDCAD technicals are bearish while prices are below 1.2530 and looking for a break of minor support in the 1.2410-15 area to extend losses to 1.2360. Longer term the break below 1.2560 opens the door to 1.1950. For today, USDCAD support is at 1.2430 and 1.2410.  Resistance is at 1.2480 and 1.2530


Further Reading


Coronavirus spread fears linger – USD strong – AUD at 11 year lows

This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.

Last update: 22 Feb, 2020

Coronavirus unnerves currency markets

The strong start to the year for “risk-on” currencies is already a distant memory.

Posted: 3 Feb, 2020

New Year Optimism Retreats on US/Iran Tension

The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.

Last update: 8 Jan, 2020


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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