The European currency showed ambiguous trading against the US dollar on Monday. At the same time, the euro was increasing during the day, which allowed the instrument to update the local highs of August 14. The development of flat trading yesterday was facilitated by the correctional sentiment in USD, which was significantly reduced last week. In addition, Monday's macroeconomic background remained half empty, so investors again focused on Brexit issues and the conclusion of a trade agreement between China and the United States, which did not add support to the instrument. Meanwhile, the German Producer Price Index in September showed an increase of 0.1% MoM after a decline of 0.5% MoM last month. Analysts had expected negative dynamics to remain at –0.1% MoM. In annual terms, the indicator fell by 0.1% YoY after rising by 0.3% YoY in August. Experts expected a decrease of 0.3% YoY.
The British pound showed ambiguous dynamics against the US dollar on Monday, maintaining a "bullish" momentum by the end of the afternoon session. Pressure on the pound is still exerted by the uncertain situation around Brexit. After the failure of the urgent vote in the British Parliament last Saturday, the probability of Britain leaving the EU before October 31 significantly decreased, but Boris Johnson continues to insist on his plan. The parliament ordered Johnson to request a new deferment from the EU until January 31, 2020, which was done. Nevertheless, the British Prime Minister expects to resolve internal contradictions in parliament and ratify the agreement. Otherwise, Johnson insists that Britain leave the EU on October 31 without a deal, which could threaten him with problems with the law.
The Australian dollar showed moderate growth against the US currency on Monday, updating local highs of September 16. Despite the attempt of correction of the US dollar, the position of the Australian currency remains quite stable. The instrument is supported by the market's anticipation of a preliminary trade agreement between the US and China in mid-November. Last Friday, Donald Trump expressed hope for a deal at a meeting with Chinese President Xi Jinping, which will be held in Chile in November.
The US dollar rose against the Japanese yen on Monday, recovering from the "bearish" end of last week. The growth of the American currency was promoted by technical factors, as well as the publication of ambiguous macroeconomic statistics from Japan. Export volumes in September showed a decrease of 5.2% YoY after falling by 8.2% YoY in August. Analysts expected a decline of 4.0% YoY. Imports for the same period decreased by only 1.5% YoY after the collapse of 11.9% YoY last month. The indicator turned out better than its forecasts of –2.8% YoY. Trade Balance in September amounted to –123.0 billion Japanese yen, which turned out to be significantly worse than market expectations of +54.0 billion yen. In August, Trade Balance was –143.5 billion yen.
Oil prices showed ambiguous trading dynamics on Monday. Pressure on quotes is provided by the uncertain prospect of a trade agreement between the United States and China. Last Friday, US President Donald Trump expressed hope that an agreement could be signed at his meeting with Chinese President Xi Jinping in mid-November in Chile, but analysts are very skeptical about such statements. An additional uncertainty factor for the oil market remains the situation around Brexit. Everything is pointing to a new postponement, which, given Boris Johnson’s inflexibility, could turn into an aggravation of the domestic political crisis in Great Britain.