Market Beat

September 2018

A volatile month for FX with focus returning to major central bank meetings

  • The ECB and SNB maintained status quo, with the former cutting down asset purchases as expected, with investors looking for first hike by mid next year. Regarding Brexit, there were more positive noises emanating out of the EU last month, and markets now expect BOE to hike rates sooner than previously thought amidst higher inflation.
  • EURUSD drifted higher to start with, as markets consolidated and EURJPY demand helping, but found stiff resistance north of 1.1750. The move reversed sharply lower following the Fed meeting towards the end of the month.
  • The Fed hiked by 25 bps as expected, but maintained a hawkish undertone for the rate path ahead (next hike expected in December). This led to a sell off in global bond markets and Asian equity markets, causing the Dollar to rally hard across the board.
  • With no resolution in sight over the US-China trade wars, USDCNH topside bets have come back in vogue; spot trading above 6.90 and market eyeing the psychological 7.0 level.
  • INR continued its losing run last month amidst higher oil prices, widening trade deficit, higher US treasury yields and a limited response from RBI.
USDCNH
*The true rate used below is a blend of EBS Market and EBS Direct rates, and account for outlier price submissions and mismatches
*Bubble sizes represent relative trade sizes for the period selected (2 Sept - 01 Oct 2018)
*High/Low prints are for indication only
EURUSD
*The true rate used below is a blend of EBS Market and EBS Direct rates, and account for outlier price submissions and mismatches
*Bubble sizes represent relative trade sizes for the period selected (2 Sept - 01 Oct 2018)
*High/Low prints are for indication only
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