Daily Market Update - Currency Futures - 8/11/2017

August 11, 2017 9:45AM CDT

Feel free to contact John here to leave a question or comment on his video.

 

Transcript for: Daily Market Update - Currency Futures - 8/11/2017

Good morning traders, John Caruso coming to you here on August 11th with your currency outlook for the day. First we'll take a peek back at last week, non-farm payrolls we did see a much stronger reading than expected. 209,000 payrolls added versus an expected 180,000. We also did see the unemployment rate decline one basis point to 4.3% so some strong data on that front.

 

U.S. Dollar

This week we have seen a series of inflation readings that have come in soft on a year-over-year basis so inflation continues to be a problem here in the US as well as in Europe. PPI slowed to 1.9% versus expected 2.0% year-over-year, and CPI slowed from 1.7% versus an expected 1.8%. That's one of the problems, probably the primary reason why the dollar's having a hard time getting out of the woods right now. The US dollar's trading down about 11% year-to-date, so it's been a rough go for the US dollar year-to-date. Currently trading 9326 down 14. I'm looking at the dollar from a standpoint of trying to play the trading range. The range that I've kind of mapped out is about 9250 on the low side, to about 95 on the high side. So you want to manage that trading range if you need to be trading the dollar here in the near term. So right now trading 9326 we look at possibly becoming bullish from a near term perspective if the market were to dip back towards 9250.

 

Euro

Inversely looking at the Euro 11850 trading up 26 right now. Largely the Euro this week has been bouncing back and forth between 11750 and 11850. We have seen a global repricing in the in the currency markets, perhaps it's because of the recent dovish rhetoric that we've seen out of the US Federal Reserve.  Actually after this week's inflation readings, we have actually seen the that the prospects for a December rate hike here in the United States declined to 37% which the lowest we've seen it in quite some time actually for 2017 it's the lowest we've ever seen it. So that's probably the main reason why the dollar's having trouble getting out of the woods, however we are starting to see some of the growth data. I mean we're seeing very strong earnings readings come in by the stock markets. I think right now aggregate earnings growth in the Nasdaq is up roughly 13% for Q2. So very strong data is still coming in from the corporate side of things. Taking a look at Europe again as I mentioned before they're having problems with inflation over there. They're also starting to see some of the economic data that's rolled in over the past two three weeks start to slow as well. European Eurozone PMI, and manufacturing services all slowed in the last reading and we did see Eurozone retail sales slowed in the previous reading as well. So they're having some issues over there if you look at their stock market the German stock market and the French stock market both down approximately 7% since May. So we're seeing a correction in Europe from that regard.

 

Japanese Yen

I'm going to switch gears here, we'll go to the Yen and just kind of give you a quick technical reading on the Yen. Right now we're signaling immediate term overbought, right now the markets trading between 91 75 and 92. If we stretch to perhaps 92 I probably look at becoming bearish on the Yen for a near-term trade. Forex traders, if you're following the US dollar versus Yen cross, we're currently trading about 109 14 so I'd go about 109 to 118 75 before you want to maybe become bullish on that cross just a quick reading on the chart there.

 

So that's all I have for you, once again feel free to reach out to me anytime, I'll be around all day. Good luck we'll talk to you next week!

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.