Forex headlines for January 9, 2013:
- Draghi: ‘Firmly’ confirms forward guidance
- Draghi: Growth risks are on the downside
- Draghi: Inflation risks broadly balanced
- Draghi: Outlines two things that could make ECB act
- Initial jobless claims 330K vs 335K exp
- Canadian news house price index 0.0% vs +0.1% exp
- No policy changes from ECB or BOE
- Fed’s George: Business investment may be ‘poised for growth’
- Senate negotiators near deal to extend jobless benefits through November
- French 2013 debt estimated at 93.4% of GDP up from 90.2% at end of 2012
- USD/CAD touches 4-year high
- Gold up $3 to $1228
- WTI crude down $88 cents to $91.46 — lowest since May
- S&P 500 up 0.6 points to 1838
- CHF leads, CAD lags for third day
Draghi used ‘firmer words to indicate a strengthening of our forward guidance’ and pledged ‘decisive action’ if credit tightens or inflation drops. The euro climbed to a session high in the minutes leading up to the speech at 1.3633 but plunged as he delivered his opening address, down to 1.3549, just ahead of the 100-day moving average. That level was a magnet for buyers and a small bounce eventually turned into a complete retracement. Last at 1.3604.
Cable did what it’s been doing for most of the week, being resilient or rising. The BOE was a non-event but cable rallied alongside the euro ahead of the ECB. Offers at 1.6500 stopped the rally just ahead and it was a sideways chop around 1.6460 for most of the rest of the day until a late round of USD selling (on NFP jitters) boosted it to 1.6480.
USD/JPY took a hit ahead of the London fix on risk aversion, falling to 104.59 after stocks fell to a three-day low. The pair bounced to 104.80 as the S&P 500 rebounded back to unchanged.
The Canadian dollar continues to take a pounding as USD/CAD has gained more than 200 pips this week to the highest in 4 years. Trading was a bit more of the two-way variety but the pair touched 1.0876 late in the day before settling back at 1.0850.
Crude was in focus after the seventh day of losses in eight days sent it below some key support levels and to an 8 month low. Curious move late in the day, however, as crude rebounded into positive territory at $95.35.