US Wrap: Forex traders yawn at news of US budget deal
- GBPUSD has soared on hopes of a “soft Brexit” hopes
- US politicians have agreed on a stop-gap budget deal
- The IMF has lifts global growth forecasts to 3.9%
- News of an extended deal on output curbs lifted crude oil
By Michael O’Neill
NY Focus: Forex markets were skittish on Monday. EURUSD traded lower, falling from 1.2262 at the open to 1.2215 in the early afternoon. Prices perked up into the close, with traders seemingly unconcerned about a dovish European Central Bank meeting result when it meets on Thursday.
AUDUSD underperformed the rest of the commodity currency bloc, finishing the day close to unchanged while the Loonie and Kiwi dollars eked out small gains.
WTI oil prices were choppy, and traded inside a $63.05-$64.10 range. Prices were lifted by reports that Saudi Arabia and Russia pledged to cooperate on production cuts beyond 2018. News of renewed production from some previously shut-down Libyan oil fields did not have a lasting impact.
Wall Street closed higher, bolstered by the US government funding deal and the bullish IMF forecasts. Netflix (NFLX: NASDAQ) announced that they signed up nearly 2 million more subscribers than analysts forecast in Q4. Prices soared in after-hours trading rising from $227.49 at the close to $247.50.
Tuesday Focus: The German ZEW sentiment surveys are on tap today. The forecasts are for upticks in all three categories, which will underpin EURUSD. If so, it will make it harder for ECB president Mario Draghi to deliver a believable, dovish EU economic outlook on Thursday.
The short-term EURUSD technicals are bullish while prices are above 1.2180 and 1.2220, looking for a break of 1.2290, to target 1.2500.
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– Edited by Robert Ryan