By XE Market Analysis
USD-CAD dropped to its lowest level since June 6 in making a low at 1.2887, driven by a Mail and Globe report, which broke during the Tokyo morning, that Canada is ready to make significant concessions on diary to secure a trade deal with NAFTA. This is potentially good news as it raises the chances for Congress to approve the White House agreement with Mexico in context of a revamped NAFTA deal. Meanwhile, both the Dollar and Yen have traded firmer today against most other currencies, while the Pound outperformed all, benefiting from EUR-GBP long trimming after reports that the UK and the EU have agreed to push back the deadline for Brexit negotiations by one month to mid November. EUR-GBP broke a run of five consecutive up days, falling today to a two-day low of 0.9047, keeping large option barriers at 0.9100 out of reach. Cable lifted to around the 1.2900 mark, but remained comfortably below yesterday's one-week peak at 1.2932. Elsewhere, EUR-USD posted a 1.1662 low, matching yesterday's low while USD-JPY continued to ply a narrow range in the lower 111.0s, which continues a phase of tight consolidative price action for a fourth consecutive session. USD-JPY remains near the midway mark of a broadly sideways, sometimes choppy range that's been unfolding for some two months now. The Turkish Lira took a fresh hit after Moody's downgraded 20 of Turkey's financial institutions. USD-TRY rose nearly 2% to levels above 6.4000 for the first time since August 15. The PBoC set the USD-CNY reference at 6.8072, fractionally up on yesterday's 6.8052.
EUR-USD posted a 1.1663 low today, which is 1 pips shy of yesterday's low (by our data), and which extended yesterday's correction from the four-week peak at 1.1733. The dynamic has been a reversal of the recent pattern, with today's dip driven by a mix of a broadly firmer Dollar and a broadly softer Euro. This is now the third consecutive week EUR-USD has rallied, and in terms of both magnitude and duration this is the biggest upswing the pair has seen since January. Key resistances at 1.1730-35 and 1.1745-52, which encompass the 20-day moving average and a series of recent daily highs, have so far been left unchallenged.
