Forex news for October 31, 2014:
- US personal income +0.2% MoM vs +0.3% est
- US personal spending -0.2% vs. +0.1% est
- PCE deflator 1.4% y/y vs 1.5% est
- Canadian GDP Aug mm -0.1% vs 0.0% exp
- Chicago PMI 66.2 vs 60.0 expected
- U Michigan Oct final consumer sentiment 86.9 vs 86.4 prelim
- Fed’s Kocherlakota: Failure to respond to ‘arguably worse’ inflation outlook risks credibility
- Fed’s Lacker says risks related to raising rates to soon not “gigantic”
- Lacker: Big issue at the next meeting will be whether to adjust rate guidance
- Fin min Schaeuble says consumption and employment remain strong in Germany
- Schaeuble calls for political union in Europe
- ECB sources see: ‘Existential questions’ for euro if reforms not tackled – MNI
- Gold down $25 to $1173
- WTI crude up 51-cents to $80.60
- US 10-year yields up 3 bps to 2.33%
- S&P 500 up 23 points to 2018 — closing record
- On the day, USD leads, JPY lags badly
- On the week, AUD leads and JPY lags
- On the month, AID leads and JPY lags
It was another day to remember to cap an incredible month in markets. In US trading the dollar caught a big early bid but a solid portion of it faded by the end of the day. The yen continued to wilt right across the board.
USD/JPY started US trading already up 200+ pips at 111.65 and it was battling 112.00 for a period. It broke through and rallied to 112.12 quickly then retraced back to the big figure while the Chicago and Michigan data came out. After a short period it made a fresh push up to 112.48 where it was finally halted by offers there. It chopped back to 111.88 but then climbed again late up to 112.30.
EUR/USD was modestly lower on terrible German retail sales earlier but only about 25 pips as US traders rolled in. It fell more than 75 pips from there in a break below 1.2500 that ran stops to 1.2486. That was a bridge too far and the pair bounced back to 1.2544 before settling at 1.2523.
Cable put in a solid performance this month and today. It went toe to toe with the US dollar and finished just behind. Don’t overlook how impressive that is. No small part of it, I’m sure, was fast money in the GBP/JPY trade and the almost 500 pip rally in that pair.
The commodity currencies were also caught in the US dollar rally. The loonie took the brunt of it first in a one-way rally to 1.1333 from 1.1189. It keyed off the Canadian GDP numbers which weren’t really that bad. After all the stops were flushed the pair fell all the way back to 1.1254.
AUD/USD slid to 0.8770 from 0.8840 as the dollar gathered strength but it did a good job collecting carry trades via AUD/JPY and rebounded to 0.8800.
October 31 FX snapshot