Monthly Forecast: October 2018

A monthly commentary/summary that discusses our broader, long-term currency analysis.

October 2018 Share this story: Andrew Kositkun Foreign Exchange Analyst USD The DXY (USD index) is relatively unchanged since last month. However, risks remain as the trade conflict between the US and China has escalated while other trade disputes remain unsolved. Read more... EUR From mid-August, when the euro crashed down, driven by many factors including concerns over European bank exposure to turn Turkey, to late September, the euro has staged a recovery. Read more... GBP September was a good month for the GBP, on a price perspective, as it moved up significantly, hitting a 2.5 month high. However this strength in the GBP was accompanied by an uptick in volatility as UK politicians returned from recess and Brexit talks enter the final months with many contentious issues unresolved. Read more... JPY Since the publication of last month's currency outlook, the JPY has been the worst performing G10 currency. Looking ahead, the JPY is likely remain stuck in a tug of war. Trade war concerns and uncertainty should continue to add safe haven flows and strengthen the JPY. Read more... CAD In recent commentaries, we cited NAFTA negotiations as a key driver for the CAD. This was confirmed as the CAD strengthened sharply after the United States-Mexico-Canada Agreement (USMCA) was announced. Read more... AUD YTD, the AUD has remained on a downward trend, driven by divergence between the RBA and Fed, as well as slowing Chinese growth and trade concerns. Short AUD remain at elevated levels and has been used by the markets as a hedge for trade war fears. Read more... CNY After a period of sharp depreciating pressure on the CNY, the currency has stabilized a bit. The reintroduction of the counter cyclical adjustment (CCA) factor may be the most significant sentiment stabilization step. The CCA factor is designed to offset the influence of higher (CNY weaker) spot closes on the next day's fix. This factor had been in use before being deemphasized in January of this year. Read more... Read More If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! Follow City National Bank on social media: Investment and Insurance Products: • Are Not insured by the FDIC or any other federal government agency • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate • May Lose Value This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. The Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2018 City National Bank – All Rights Reserved. 350 South Grand Avenue, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | CNB MEMBER FDIC