Volatility on the Forex Market Has Grown Significantly

The day before was full of important economic reports and news. Trades on the main currency pairs were very active. The biggest drop was shown by the New Zealand dollar. The NZD/USD quotes fell by more than 150 points. In New Zealand, the composition of the government coalition has been formed. The Labor Party has teamed up with the antiimmigration party. The amalgamation of these two parties has given them the opportunity to shoot past the conservative National Party, which was previously the winner of the elections in New Zealand, held on September 23. The country ruler will be the Labor leader Jacinda Ardern.

The pound was under pressure due to weak statistics. The National Statistical Office of Great Britain reported that in September the volume of retail sales in the country decreased by 0.8%. Experts expected the index to fall by 0.1%.

There is an information that the government of the country plans to apply Article 155 of the Constitution of Spain, which can suspend the autonomy of Catalonia. The financial markets participants support the government’s intention to preserve the unity of the country.

Support for the US currency is provided by positive economic reports. In October, the index of manufacturing activity of the Federal Reserve Bank of Philadelphia grew by 17.2% to 27.9. Market expectations were at the level of 22.0. Over the past week, the number of initial applications for unemployment benefits fell from 244,000 to 222,000. At the moment, demand for the US dollar has increased significantly.

Market Indicators

Major US stock indices showed mixed dynamics: #SPY (+0.03%), #DIA (+0.08%), #QQQ (0.37%).

The 10year US government bonds yield is recovering from yesterday’s fall. At the moment the indicator is at the level of 2.36%.

The dollar index (#DX) closed the trading session in the negative zone (0.25%).

Today, the reports on inflation and retail sales in Canada are at the center of attention at 15:30 (GMT+3:00).

At 17:00 (GMT+3:00) the data on sales in the secondary housing market in the US will appear.

by JustMarkets, 2017.10.20