Good morning

	High	Low			High	Low
EUR/USD	1.1230	1.1152		USD/ZAR	13.9977	13.8922
GBP/USD	1.5389	1.5269		GBP/ZAR	21.46	21.28
EUR/GBP	0.7331	0.7287		USD/RUB	70.30	67.93
USD/JPY	119.80	118.84		USD/ILS	3.9479	3.9147
GBP/CHF	1.4954	1.4844		S&P 500	1,947	1,931
GBP/AUD	2.2113	2.1920		Oil (Brent)	48.84	48.29

Some GOOD and some BAD data out of China overnight,  Imports -13.80% (from -8.1%) BAD, Exports -5.50% (from -8.30%) GOOD and August Trade Balance 60.24bn (from 43.03bn). As I mentioned yesterday we will continue to see some good and bad data coming out of China until things stabilise to the extent that the numbers no longer get worse and start to recover towards the black.

Japan GDP -1.20% from -1.6% strangely has not had that much of an impact given the currency has only traded in a 1 JPY big figure o/n. The cat was out the bag long ago and thus the better GDP number failed to lighten up the JPY. Bloomberg has reported that BOJ officials said to waver on confidence in underlying growth making them cautious about the outlook for a rise in inflation.

USD seems to have been hit o/n on the back of very little. More buyers than sellers – profit taking. Other than the data I reported above, there was nothing else to spook the currency. Looks like the market took the opportunity to sell the USD while the US enjoyed their long weekend. No doubt though, the strong German numbers has gone some way to lift the EUR, with EURGBP in particular dropping from  0.7355 yesterday to 0.7280at the time of writing. With the little data to work with, FX traders will alter their positions as the herd changes direction. Keep in mind EURUSD is still very much in the range (I am excluding the rally to 1.17 on black Monday) and likely to stay like this as we get closer to next Thursday’s FOMC announcement.

GBPUSD is a strange one, trading down recently to 1.5170 it has rebounded over 2 big figures to trade at 1.5355 as I write this. Ossie was 100% right when he said if we can’t break through and close below 1.5200 the currency will move back and it has done just that. Does this change my overall perception of the short-medium term outlook – NO. I am still a USD bull and happy to get whiplashed knowing my time is drawing closer.

Have a good day

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