A largely rangebound session, but one where we some of the risk related pairings pushing higher in the anticipation of a Clinton victory. Since the FBI vindicated Mrs Clinton in the email scandal, Trump momentum has steadily eased off, and we are now seeing signs that a risk on conclusion is set to follow. Late in the day, we have seen AUD and NZD buying resumed, but the firmer is still struggling ahead of the weight of offers in front of .7750.
Maintaining levels here assumes these orders will be filled if the election plays out as some of the polls suggest, and this has been allied by fresh NZD buying despite the real prospect of an RBNZ rate cut tomorrow. This now looks priced in – 70-75% in the futures market – but NZD longs may also be looking to a possible on-hold as well as the broader risk on mood.
The CAD is getting drawn into the moves also, looking towards 1.3300 again as oil prices recover with commodities across the board. USD/JPY gains earlier in the day made very light progress through 104.50, but again, remains well supported for a move on 105.00 and beyond once the presidential votes show a clear(er) picture. Against this, EUR/USD is fighting the positive USD impact, but part of this may be coming through EUR/GBP again.
GBP has been under pressure through the session, but late in the day, news that the Supreme Court will hear the Govt appeal over the High Court ruling on Article 50 last week, with a decision not until next year did little to add to this. Elsewhere, we continue to see the CHF holding better levels seen over the last 11-12 days, but support ahead of 1.0750 vs the EUR and just under .9700 vs the USD are noteworthy.
USD/MXN has fallen significantly through the week, but some moderation seen since back to the mid 18.00’s.