Monthly Forecast: November 2018

Foreign Exchange - Monthly Forecast
November 2018
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Alan Rose
Alan Rose
Foreign Exchange Head Trader
After multiple months of sideways trading and consolidation patterns, the DXY (USD index) regained its upward momentum in October from earlier in the year and is currently testing yearly highs. Part of the explanation for the DXY's strength can be drawn from continued U.S. exceptionalism regarding above trend growth and the expectation of further Fed interest rate increases. Read more...
After months of sideways trading, the euro weakened during October and remains near YTD lows. A slowing EZ economy combined with political friction and turmoil regarding the confrontation between Italy and the EU regarding the Italian budget overshoot are hurting sentiment. Read more...
While the GBP largely mirrors euro movements in general, it is strongly impacted by the ongoing Brexit negotiations and PM May's standing within her own Tory party. Read more...
The JPY remains trapped and buffeted by multiple market forces causing the JPY to remain volatile within very short term cycles. Read more...
Despite what appears to be a successful NAFTA negotiation morphed into the new USMCA agreement and another Bank of Canada interest rate hike last week (5th since middle of 2017), the CAD has remained vulnerable in the short term. Read more...
The AUD has remained under pressure since the beginning of 2018 and is one of the worst performing G10 currencies down by 9%. It remains near YTD lows for most of October with market sentiment very negative. Read more...
The CNY continues to reflect all the negativity surrounding heightened trade tensions between the U.S. and China and the downstream effects for the Chinese economy and Chinese equity markets. Read more...
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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.
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