Forex news for New York trade on June 16, 2020:
- Powell: There's a reasonable probability more support will be needed from Fed and congress
- Powell: Economic rebound will leave us 'well short' of January levels
- Powell: Significant uncertainty on timing and strength of recovery
- US May advance retail sales +17.7% vs +8.4% expected
- Macklem: BOC will buy bonds until the recovery is well-underway
- Fed's Harker: Expects 2020 to show a sharp recession
- Arizona reports a surge in cases by 6.5% vs. 2.8% yesterday
- White House in 'deep discussions' on +$1 trillion stimulus package
- Texas hospitalizations reaches 2518 confirmed patients a new record
- Beijing raises Covid 19 response to level 2
- Florida Covid 19 cases +3.6% vs 7-day average of 2.5%
- The NAHB housing market index for June 58 vs 45 estimate
- US April business inventories -1.3% vs -1.0% expected
- US May industrial production +1.4% vs +3.0% expected
Markets:
- Gold up $1 to $1726
- WTI crude oil up 96-cents to $38.08
- US 10-year yields up 2.5 bps to 0.75%
- S&P 500 up 50 points to 3116
- CAD leads, AUD lags
It was a busy day on the fundamental agenda and a few headlines stood out. One was Powell highlighting that the Fed didn't have to buy the full allotment in the corporate bond program. That hurt sentiment. So did headlines from TX, AZ and FL or virus cases.
Coming into the day the mood was upbeat after action from the BOJ overnight and the ebb and flow of sentiment. However the highs of the day for risk trades came early and that was reflected in commodity currencies and dollar-trades more generally.
The loonie benefited from an early jump in oil prices as WTI hit $39.06. That helped USD/CAD to a session low just below the Asian bottom but the pair couldn't get through 1.35 and then jumped all the way to 1.3620.
The euro was highly volatile as well as it dropped to 1.1228 after several runs at 1.1350 fell short. The selling intensified into the London fix where the pair bottomed at 1.1228 before a 40 pip bounce.
Cable followed a similar path and carved out something of a double top at 1.2669 before sagging down to 1.2550 into the fix. The late bounce, however, has been less-inspiring than cable and the pair is set to finish at the lows of the day.
For all the back-and forth, USD/JPY was choppy but there was really no visible trend to trade.
