Dollar Rises As U.S. Stocks, Oil, Pound Fall
Ashraf Laidi | Nov 13, 2018 12:01AM ET
There was no shortage of factors damaging stocks and spurring the US dollar yesterday. US indices sagged, technology companies were damaged by a downgrade in outlook by Apple's (NASDAQ:AAPL) suppliers and by Goldman Sachs (NYSE:GS) becoming further engulfed in the Malaysia sovereign wealth fund scandal. The pound fluctuated +-100 pips before sinking later in the session as Brexit worries flared on talk that some cabinet members won't support current offers.
The US dollar was the top performer while the pound lagged. UK employment data is due up on Tuesday.
Cable fell 120 pips on Monday as the market's patience wears thin for a Brexit deal. Finding an Irish border deal that can be supported by May, the DUP, Conservatives the EU and UK parliament is proving to be a near-impossible task.
The main negotiators continue to highlight progress but repeated leaks highlight problems and discord. Cable made a huge jump at the start of last week but has now given most of it back in three days. There is still some breathing room before the 1.2662 August low but that's a critical level. The recent series of lower highs isn't encouraging.
The eurozone is facing its own problems as EUR/USD fell a full cent to start the week with the Italian deadlock continues as the ruling coalition continues to challenge Brussels' budget limits.
There was no help from stock markets as the S&P 500 tumbled nearly 2% led once again by technology shares. Apple fell to the 200-day moving average and is down 17% from the October high in a sign of how aggressive the selling has become.
Oil bulls continue to take a beating as the OPEC chatter led to a climb at the open followed by a wave of selling that sent WTI down $1.38 to $58.82 in an eleventh consecutive day of declines. USD/CAD rose to the highest since July with Canadian oil down to $16.
Looking ahead, UK fundamentals will briefly steal the spotlight on Tuesday with employment data due out at 0.930 GMT. The unemployment rate is expected to be steady at 4% with weekly earnings forecast to rise to 3.0% from 2.7%. A weak reading could send cable down to the August lows.
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