Forex news for US trading on July 11, 2016:
- UK PM Cameron says he will tender resignation Wednesday
- Leadsom pulls out of UK PM contest
- Merkel: Britain will have to clarify how quickly it wants to shape its EU relationship
- PBOC may roll over liquidity operation in July to ease - Securities Journal
- Theresa May: "Brexit means Brexit"
- Fed has largely achieved what it can on its dual mandate says George
- Fed's George: Q2 GDP looks like it's coming back
- June 2016 US labour market conditions index -1.9 vs 0.0 exp
- ECB QE count: Bought €16.10bn vs €9.73bn prior in QE
- There will be no big solutions for Italian banks says Dijsselbloem
- Canadian June housing starts 218.3K vs 189.0K expected
Markets:
- Gold down $11 to $1355
- WTI crude oil down $0.91 to $44.51
- S&P 500 up 7 points to record close at 2137
- US 10-year yields up 7 bps to 1.43%
- GBP leads, JPY lags
It was a mixed bag of themes. There was some positive risk appetite but not in the commodity space. The yen was under steady pressure after upper house elections in Japan.
USD/JPY was already flying high when US traders arrived but continued another 40 pips higher to 102.85 in a very controlled manner. It was helped along by rising Treasury yields as Brexit fears continue to fade.
Cable jumped in Europe when Leadsom dropped out of the race. Cameron resigning and May getting the quick promotion to PM didn't jar markets. When she repeated that 'Brexit means Brexit' in her speech, that led to some minor GBP selling but overall it was a choppy trading day in the 1.2950 to 1.3010 range.
EUR/USD caught a bid at 9 am in New York and ran to a session high of 1.1075 but slowly sagged down to 1.1038 at the European close. It then climbed back to the mid-point in somewhat uninspired trading
There was good action in commodity currencies, especially early. USD/CAD continues to climb on falling oil and hit 1.3135 from 1.3055 in Europe. After hitting the high, it failed to continue despite more downward pressure on crude.
NZD has been a star performer recently but there was a solid pullback to start the week. Most of the selling was in the local session but it dropped another 25 pips in New York. AUD/USD was also lower but a break of the Asian lows didn't inspire much follow through.
