Forex trading news for September 14, 2016
- Abe economic advisor says Bank of Japan should counter yen appreciation
- US weekly oil inventories -559K vs +4000K expected
- Some BOJ officials still favor increasing JGB purchases
- BOC's Poloz says China tops list of global worries
- August 2016 US import prices -0.2% vs -0.1% exp m/m
- Teranet Canada Aug house price index +11.4% vs +10.9% y/y prior
- BOC's Wilkins: The bar for changing our inflation target mandate is high
- US MBA mortgage applications 4.2% vs 0.9% prior
- BOC's Wilkins: Canadian rates are already quite stimulative
Markets
- Gold up $3.55 to $1322
- WTI crude down $1.29 to $43.61
- S&P 500 down 1 points to 2126
- US 10-year yields down 3 bps to 1.70%
- NZD leads, CAD lags
The volatility continued on Wednesday despite a ho-hum day of news.
The US dollar was generally softer as it unwound some of Tuesday's gains.
At the start of New York trading EUR/USD was generally flat around 1.1200 but it caught a bid and climbed to 1.1275, hitting a high at the London close before slowly setting back to 1.1250.
Cable hit both a session low and session high in the US session. The first move was down as it slipped to a two-week low of 1.3139 in what looked to be option-related selling. The low was abrupt and it climbed back to 1.3200 for the London close and then up to a session high of 1.3239 later. That still only bites into a small part of Monday's drop.
USD/JPY fell on BOJ reports in Asia and European trading. A 50-pip bounce was the first move in US trading as it tracked back to 103.00 but as dollar selling picked up it traced down to a session low of 102.25 late and is near 102.40.
USD/CAD was choppy. The pair hit 1.3200 early as the oil market shrugged off the late-Wednesday API report. That should have been a hint for CAD and oil traders. When the EIA report hit and showed a surprise build for the second week, crude quickly rallied and USD/CAD dropped 60 pips. But that move was jumped on buy oil sellers and USD/CAD buyers. It was reversed in a half hour and oil hit lows late. USD/CAD hasn't been able to break above 1.3200 definitively but did take out the August high.
AUD/USD was sidelined as it chopped in a 0.7450 to 0.7500 range. It challenged the Asia-Pacific high of 0.7451 at the start of New York trading but failed and then settled back into the middle of the range.
NZD/USD, on the other hand, successfully pushed the upside. It rose through the Asian high of 0.7285 and up to 0.7313. The story there was yield as Treasuries and European bonds ticked lower.
