Forex today: dollar weaker against most G10's.
With a lack of data, apart from Sterling, the FX space was subdued in the main with most participants focused on the upcoming US corporate earnings and the US government shutdown mostly ignored. Earnings continue to pump up equities, while the benchmarks were lifting between 0.3-0.7% to make fresh record highs.
Elsewhere, the USD was weaker against most of the G10's while the treasury curve flattened slightly with the 10 years down 1bp and the 2 yrs up1bp. With the dollar still under pressure, the pound took off towards 1.40 while the euro only managed to squeeze out a gain of 0.3% to 1.2274 the high as market brace themselves for the ECB later this week. There was a bounce towards 1.2260 but it got erased on news that the US gov't WILL reopen. 1.2225 was it post the reopening headlines and euro then closed at 1.2240 with control in the hands of the bulls fundamentally and technically. The yen was squaring up ahead of the BoJ in case of no tightening bias while bulls were capped at 111.23. Commodities were quiet while oil hangs near highs with storage still expected to draw for the tenth week. Gold is choppy awaiting the next moves in the dollar.
AUD moved high as did the Kiwi. AUD opened near 0.8015, and then cleared the 0.8020 resistance to 0.8027 the high before gains wiped out after the news of a vote to reopen the U.S. government and stablised around the familiar 0.8005 level while the technical outlook remains bullish for the forthcoming session. NZD/USD was choppy and fell back to 0.7300in the closing hours from 28 pips the high, also leaning bullish on the technicals for the Asian session.
Key events
Five reasons why the BOJ cannot move to normalize monetary policy - Nomura
Key notes from US
- Crypto Today: Sell-off in crypto space gathers momentum on Monday
- USD/JPY surges above 111 as US government shutdown comes to an end
- Relief rally lifts Wall Street to record highs on Monday
- US: probability of a debt ceiling dispute disrupting financial markets is on the rise - Wells Fargo
- Gold steadies above $1330, looks to close the day flat