Forex news for New York trade on June 14, 2017
Fed:
- Federal Reserve hikes interest rates by 25 basis points, as expected
- Highlights of the updated FOMC forecasts - higher 2017 growth
- FOMC Dot Plot - One more rate hike in 2017
- The FOMC statement for the June meeting
- Highlights of Yellen's opening statement: Inflation largely driven by one-off items
- Yellen: We believe conditions are in place for inflation to move up
- Yellen Q&A: We've certainly taken note of several weak core inflation measures but feel it will rise
News:
- US CPI YoY 1.9% vs 2.0% estimate
- May US retail sales -0.3% vs +0.0% m/m expected
- Shots fired at Republican event in Virgina. House majority whip wounded.
- Atlanta Fed revises GDPNow forecast higher
- US weekly oil inventories -1661K vs -2450K expected
- US April business inventories -0.2% vs -0.2% expected
- GM to extend summer shutdown at two plants
- Canada Teranet/National Bank May HPI mm 2.2% vs 1.2% prev
Markets:
- US 10-year yields down 7 bps to 2.14%
- Gold down $9 to $1257
- S&P 500 down 3 points to 2437
- WTI crude down $1.73 to $44.73
- AUD leads, CHF lags
It was a heck of ride today. The market got excited about a dovish Fed after soft CPI and retail sales data and that meant a hefty wave of US dollar selling. It reversed when Yellen didn't deliver and instead stuck to the script and left the forecasts unchanged; blaming one-offs for lower inflation.
USD/JPY fell to 108.92 from 110.30 on the data and stay around 109.10 until the statement but afterwards jumped to 109.85. It took awhile to convince the market that Yellen was serious but she didn't back down, saying inflation will rise later.
The round-trip wasn't completed in USD/JPY but it was in EUR/USD. It's a great chart to look at as the election night high of 1.1299 held in the 100 pips rally to the upside but it crashed down to 1.11.95 on the statement.
Cable also did the round trip in a rise to 1.2815 and a bit of an intraday head-and-shoulders before a drop back to 1.2730.
USD/CAD has rightfully been in focus after four days of declines but the pair is finishing unchanged on the day at 1.3237 after touching 1.3162 on several occasions. Oil is also playing a factor in the trade at it cratered after the latest US inventory report.
AUD/USD is one I highlighted at the start of the month as a seasonal strong point for June and it continued the rise with another half-cent gain. It had been another 50 pips higher but faded after the Fed and that raises questions about today's earlier break above the April highs and 200-dma. The picture is still bright but the Aussie employment report later is a big risk.
