27 September 2016 at 14:14 GMT
By John J Hardy
Key developments in FX today:
We'll reserve judgment on today's moves until at least the close of trade today as we've seen a pump and dump in risk appetite over the US presidential debates overnight and then signs that even the reversal is being reversed.
A look at USDCAD
, for example, showed the pair squeezing through resistance ahead of the US presidential debates, only to be sent reeling back lower when Clinton was seen as winning, then rallying again back above 1.3250 on weak risk appetite in Europe today and on an oil sell-off that was sparked by an impasse in Saudi/Iran negotiations on production cuts. That rally was then summarily cut in half again for no apparent reason and leaves traders in limbo on whether to believe in the break attempt higher. We should know soon enough.
and USDCAD are three of our proxies for determining whether the greenback can get anything going here versus riskier currencies (in the case of the latter two) and whether the JPY or the USD outperforms if risk appetite continues to head south after trying to find inspiration for a rally in the presidential debates but clearly failing to sustain one thus far.
See more in the Notes of Interest in the attached FX Board PDF.
– Edited by Clare MacCarthy
John J Hardy is head of FX strategy at Saxo Bank