Stock Markets Take a Hit but FX continues to Range

Yesterday we saw a correction in the major stock indexes around the world as the bullish run over the last few weeks took a breather. The DAX and the S&P corrected over 1% but the effect of this was not felt in the FX markets though. The FX markets continued to see a lot of ranging with the exception being a few pairs like the USD/CAD. The USDCAD was affected by currency flows for the month end and also the statement from the BOC Governor who said that the Canadian economy was hit by the low Oil price and that he expected the effects of this to continue for the next 3-5 years at least. This led to a bullish run in the pair which saw it reach its highs at 1.3280. Today, the Canadian dollar is trading at 1.3201.

Today morning also saw the first Presidential debate in the US and though most of the pairs remained unaffected, this debate again seemed to affect the USDCAD the most and the pair corrected by more than 100 pips to end up sitting at the support at 1.3175 as we write this. The morning also saw the strengthening of the yen for some period of time and then a unravelling of this strength post the debate. This saw the USDJPY move 80 pips either way providing a good opportunity for day traders to fill their coffers.

This morning also saw the release of data from China that showed that the industrial profit growth in China was the highest since 2013 which showed, at least on paper, that the Chinese economy was recovering. This data is controlled by the government and so it always makes sense to take in such data with a pinch of salt. For today, there is no major news in the Euro region with the only news of note to be the release of consumer confidence from the US.
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