News & Analysis

Euro plunges post ECB; USD recovers; Gold close three week lows

Oct 26, 2017 | Daily Market Outlook

Today’s high impact news:

  23:30 AEDT – USD Advance GDP

Thursday saw gains on the US markets – the Dow Jones added 70.41; S&P500 added 3.25. Earnings continue to be the main driver in the US. Twitter increased by 18.5% and beat market expectations. Ford also reported above expectations, rising up to 1.9% while unemployment claims almost met expectations at 233K.

The ECB kept the minimum bid rate at 0.00% as expected. The real fireworks got going into the ECB press conference. The ECB commented it would slash the level of bond purchases in half, from 60 billion Euros to 30 billion Euros, expected to start early 2018. In Draghi’s introductory statement, he said that the monetary policy decisions made Thursday were taken to preserve the “very favorable financing conditions that are still needed for a sustained return of inflation rates towards levels that are below, but close to, 2 percent”. This announcement turned the Euro’s fortunes as it was heavily sold and consequently the EURUSD lost 161 pips. Other Euro crosses didn’t fare any better either – EURNZD lost 127 pips; EURJPY -150 pips.

The USD rallied off this news making strong gains to GOLD -$11 and an already fragile AUDUSD lost another 48 pips to be trading back in the .76 area. Europeans stocks rallied – FTSE +39.29; DAX fresh break out into high’s closing 179.87 points higher.

Local ASX200 has opened higher this morning. USD strength has continued with gains to JPY AUD and EUR.

EURUSD Daily – buyers failed to beat 1.1845 level. ECB news confirmed buyer weakness with a plunge of 161 pips to July levels.

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