Forex news March 23, 2015 US edition:
- February 2015 US CPI 0.0% vs -0.1% exp y/y
- Real weekly earnings -0.1% vs +1.2% prior m/m
- US Feb new home sales 539K vs 464K expected
- March 2015 US Richmond Fed manufacturing index -8 vs +3 exp
- US Markit manufacturing PMI 55.3 vs 54.6 exp
- January 2015 US FHFA HPI 0.3% vs 0.5% exp m/m
- March 2015 US Philly Fed non-manufacturing business survey 48.8 vs 46.9 prior
- Fed's Bullard doesn't understand negative bond yields
- US sells 2-year notes at 0.598% vs 0.600% WI
- Gold up $3.80 to $1193
- WTI crude up 20-cents to $47.65
- API crude oil inventories +4.8m barrels
- S&P 500 down 13 points to 2091.50
- CHF leads, GBP lags
The market wasn't sure what to do with the CPI data at first. The US dollar went higher on the headline, then down on wage growth and then higher again. Other headlines, including the blockbuster home sales numbers, had only a limited effect.
EUR/USD rose above 1.01025 on the wage inflation fears but it only held there for a few minutes before reversing and eventually falling to a session low of 1.0891. Options at 1.0900 may have kept downward pressure on. After Europe clocked off it got very quick in consolidation around 1.0925.
USD/JPY similarly hit a session low of 119.22 on the CPI numbers then stormed to 119.70. A second push fizzled just ahead of 120.00. Afterwards, weakness in stock markets sparked a bit of a turnaround and it fell to 119.60. Last at 119.73.
Cable was the laggard of the day on soft UK CPI data. The US inflation report also caused in a 1-cent whipsaw. US traders arrived to 1.4920 and it finished at the lows at 1.4844. YMonday's low of 1.4838 is nearby support.
USD/CAD was mostly a victim of US dollar moves. Oil was higher early in the day and that also contributed to post-CPI selling down to 1.2425 but the pair recovered to finish the day near 1.2500.
AUD/USD spiked on CPI as well, hitting 0.7934 -- the highest since late January but it didn't last and finished flat near 0.7875. Nader Naeimi, a prominent fund manager at AMP Capital, reversed his longstanding short position on the Aussie and now says he expects a 10% surge against the US dollar.
