Forex headlines for June 19, 2014:
- US initial jobless claims 312k vs 314k exp
- June US Philly Fed survey business index 17.8 vs 14 exp
- US May leading index +0.5% vs +0.6% expected
- McCarthy elected as US House majority leader
- Obama says US prepared to take ‘targeted’ action in Iraq
- Confidence in Congress falls to a new, spectacular low as faith in all institutions breaks down
- Eurozone finance ministers said to back Lithuania joining euro bloc
- ECB’s Visco: Inflation is persistently low
- EU’s Klaus Regling says the ESM direct bank recap will be ready when necessary
- Banks pooled FX order details and colluded
- Canadian export index hits 3-year high
- WTI crude up 65-cents to $106.62
- Silver up 85-cents to $20.75
- Gold up $40 to $1317
- GBP leads, NZD lags
The pound was the top performer on the day (at least on the forex field) as it finally broke through 1.7000 and it looks poised to close above the key level. Equally impressive was cable’s brief rally above the 2009 high of 1.7043 to a high of 1.7063. The US dollar has caught a small bid late in the session to cool cable to 1.7036.
The real star of the day has been the precious metals complex. The dovish bent at the FOMC set off a short squeeze that was fueled by a domino sequence of technical levels falling. It was a take-no-prisoners parabolic move to $1320 from $1280 all in US trading.
The mode in Asian and early European trading was to continue selling the US dollar but the momentum stalled with USD/JPY at 101.74. EUR/USD could only reach as high as 1.3644 and from there it slowly unwound with the euro now down to 1.3604 and USD/JPY flirting with 102.00 twice but so far unable to break it.
An interesting turnaround in oil took place away from the front pages today. WTI slide down to $105.32 but closed at the highs of the day in a $1.30 turnaround.
The commodity bloc wasn’t too active but was generally a touch weaker, especially AUD/USD as it slid down to 0.9400 from 0.9430.
