Forex news and economic trading data for Americas session June 10, 2016.
- US stocks end the week on a down note.
- CFTC commitments of traders: GBP short position swells ahead of Brexit vote
- Bonds continue to get bought
- Stocks catching the Brexit cold
- US-made budget deficit -53B vs estimate of -60B
- Dollar continues move higher. UK poll sends GBPUSD tumbling lower.
- Independent Brexit Poll: Leave 55% Remain 45%
- Baker Hughes oil rig count 328 vs 325 last week
- Bad day for Europe stocks
- June 2016 US Michigan consumer sentiment 94.3 vs 94.0 exp
- May 2016 Canadian employment change 13.8k vs 3.8k exp
- Low rates are part of the solution not the problem says ECB's Constancio
- Here's why the swissy could be a good Brexit trade?
The USD ended the week on by moving higher against most of the currency pairs (the JPY and the CHF were little changed).
Fundamentally, Canada employment came out a bit stronger than expected with the gain in jobs centered in the full time category. That sent the USDCAD lower but only temporarily (more on that later).
In the US, the only piece of data was from the University of Michigan which had the sentiment index come out higher than expectations but lower than the prior month. Of more significance was the decline in the 5-10 year inflation expectations to 2.3% from 2.5% . That was a record low,and it led to lower yields in the US. It also is another reason the Fed should stay on hold when they meet next week. However, let's face it...yields are low all over the globe. German, Japan, UK yields are all at record low levels SO buy bonds. The dollar can go where the flows take it and today that was up (PS. oil prices were down today which helped the greenback too).
A bigger catalyst to the dollar today came during the illiquid US afternoon session. A headline crossed of a Brexit poll from the UK Independent that had Leave vs Stay leading by 55% to 45% (they ignored the toss up sector). Initially there was a little reaction, then all of the sudden the GBPUSD tumbled. Part may have been the poll, part was likely the illiquid Friday market. Fifteen minutes later, the pair was down 171 pips. Whooshhh! It recovered 70 of those pips by the close, but overall, the GBP was a dog for the day and it ended up dragging the EURUSD lower and also the commodity currencies as well.
Speaking of the EURUSD, it fell below the 200 hour MA at the 1.1280 level and is closing near at the 1.1250 level. It was a week that saw the pair painfully and slowly move higher after last Friday's surprise Employment report. The pair stalled yesterday just short of the 61.8% retracement at 1.1417. That stall was enough get the seller back interested.
The USDJPY is ended little changed. It spent the NY session trading higher and lower. For the week the pair is actually a little higher (remember it closed near the lows on the employment day). It is closing below the 100 hour MA which is heading sideways at 107.072. That is also the midpoint of the weeks trading range. A move above 107.07 will be more bullish early in the new trading week.
As mentioned the USDCAD fell on the employment report but by the end of the week, had recovered the full decline and had moved back above the 100 hour MA at the 1.2742. The low reached today, could not take out the low from Wednesday. That - and oil prices falling close to 3% - helped push the price back higher.
The AUDUSD is closing the week back below the 100 day MA after closing above the MA on the previous 4 trading days. The high on Thursday corrected about 50% of the move down from April. That was all she could muster and the selling started. For the NZDUSD it spent the week rallying. It got help when the RBNZ did not change policy (there were some looking for a cut). Today, the pair fell toward the 100 hour MA at 0.7031 currently. IF it is going down further in the new week, look for a break of that level.
Next week...The FOMC, BOE and SNB meet. No changes expected. The BOE has their hands tied as the Brexit trumps anything else. The CHF has been a safe haven choice of late and may get some complaints from the SNB. The FOMC will be eyed by the wordsmiths for clues for July. How about...."We will have a press conference in July". I don't think they would do that but the Fed has shot themselves in the foot many a time. Australia employment. US CPI will be of interest. And of course Brexit pollls
