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Forex today: VIX closing the lowest in a month head of FOMC this week, dollar slides

Forex today allowed for a slide in the greenback as we approach the FOMC this week where much of the upside in the dollar was priced in on the basis of a 25bps hike and three more in 2018. 

In the absence of fresh impetus besides the JOLTS job openings arriving at 5.996m vs 6.090m consensus, the DXY was down 0.03% at the time of writing at 93.87 having traded between 93.666 - 93.918 on the day as markets assess the divergences between global banks figuring that the Fed may not be too far ahead of the pack with a flatter yield curve anchoring the greenback at the start of the week.

The higher betas performed more positively on Monday with the VIX closing the lowest in a month and investor's motivations aided Wall Street at the start of the week with a steady rise in the benchmarks for the best close in stocks since 1992.

USD/JPY rose from 113.24 to 113.69 the high while the euro gave out to the bears into the close that failed on 1.18 attempts falling from a high of 1.1812 to a low of 1.1763. Sterling has been drifting lower from the off with Brexit concerns mounting in the European day with Brexit Minister Davis appearing to soft-pedal the agreements reached with EU negotiators, suggesting they represented as “statement of intent” rather than a legally enforceable deal." UK house prices also fall as markets await the more important CPI data on Tuesday. GBP/USD fell from 1.3431 to 1.3330 the session low.

As far as the commodity sector went, gold was the lowest since July. Oil remained firm, which analysts at ANZ argued that in part this reflected the solid growth climate, but also note that the Forties Pipeline System is being shut for repairs for some weeks - WTI rose 0.7% to USD57.8/bbl. Copper was tracking the mood around China while AUD was unable to capitalize on a weaker dollar despite improved tone across the high-beta sector, drifting lower from 0.7545 to 0.7503 the low. USD/CAD was caught i a sideways chop between1.2830/69 while the Kiwi sat on the 0.69 handle still at the top of its range after the Reserve Bank governorship announcements yesterday revealed that it will be left in the hands of Adrian Orr, a past head of the RBNZ Economics Department and Deputy Governor (currently heading the New Zealand Superannuation Fund). 

Key events ahead:

Aussie House Price Index (QoQ) (Q3) 

The National Australia Bank Business Confidence / Conditions

Key notes from US session:

JOLTS: decreased 181k in October to 5996k - Nomura

DJIA, S&P closed at records as Fed's meeting looms

Gold drops to fresh 4-month lows, tests $1240

 

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