Forex news for March 16, 2017
- BOE's Forbes: Both sides of growth/inflation trade off argue for hikes
- US stocks end the day near unchanged levels
- What's next on the Federal Reserve calendar
- Fast break the other way. EURUSD races to the upside. Extends narrow range.
- USD rally is over; buy gold - ABN AMRO
- Euro hits six-week high after Nowotny hints at rate hike
- Nowotny: ECB rate increase may be on the way
- I expected a bit more volatility today
- Here it is...The winning March Madness Bracket
- ECB's Praet: Outlook now better than it has been in many years
- Al-Falih: OPEC cuts may be extended if necessary
- Mnuchin: Repeats that strengthening US dollar in long term is good
- Fed hike probabilities probably haven't fallen as much as you think
- The winner of a White House feud could shape the future of US policy
- European stocks close with solid gains
- When it comes to 3s, rate hikes are unlucky for the stock market
- USD: 3 Reasons why the pullback won't last - Credit Agricole
- This (potentially) huge FX story was buried in all the other news
- All districts counted in Dutch election, here are the results
- January US JOLTS job openings 5626K vs 5562K prior
- You don't even need to beat the market to make a billion
- How each department fares in Trump's skinny budget
- May tells Sturgeon to jog on with second referendum
- March 2017 US Philly Fed business outlook index 32.8 vs 30 exp
- US weekly initial jobless claims 241K vs 240K estimate
- US February housing starts 1288K vs 1264K expected
- Pound shoots through 1.2300 as the BOE hawks stretch their wings
- Bank of England MPC votes 8-1 to keep rates unchanged at 0.25% Forbes votes for a hike.
In other markets:
- The US stocks are ending the day little changed. The S&P index is down -3.88 points or -0.16%. The Nasdaq index is virtually unchanged (up 0.71 points). The Dow is down -15.55 points or -0.07%
- In the US debt market. The 2 years is up 2.8 bps to 1.3281%. The 5 year is up 4 bps to 2.0432%. The 10 year is up4 bps to 2.533%
- Spot gold is ending the day up $7.00 or +0.56% to $1226.50. The price of gold dipped below the $1200 level but has rallied over the last few days with the fall in the USD.
- WTI Crude oil is down -$0.05 or -0.10% to $48.81. The low reachedd $48.45. The high extended to $49.61.
The day after the FOMC rate hike and more dovish (less hawkish) statement sent the US dollar lower, the highlight for the day came from the BOE's surprise announcement that Kristin Forbes voted to raise rates by 0.25 basis points. The vote was 8-1 in favor of no change but "some members who voted to hold would consider reducing stimulus after relatively little further upside news on growth or inflation" (see post here). That sent the GBP pairs racing to upside.
In the US today, housing starts were better than expectations. Initial jobless claims continued to show job growth, and the Philly Fed Business index (+32.8 vs 30.2 est) was lower from last month's surprise surge to 43.3 but higher than the estimate. The bad news was that US building permits were a disappointment (1213K vs 1268K est).
Did the overall better data help reverse some of the dollar's decline? Well activity was mixed for most of the day with the dollar rising against the NZD, AUD and CAD, and falling against the EUR, GBP and JPY.
Later toward the end of the NY session, the EUR pairs got a boost from a headline comment from ECB's Nowotny saying that the deposit rate could rise before the main refinancing rate (CLICK HERE). That news headline sent the EURUSD up about 62 pips from the NY session low of 1.0707 to a new day high at 1.0769. Technically, the trading action today in the EURUSD pair held above support at the 1.0700 to 1.0713 area (click here). That area remains a key line in the sand for longs now. Stay above is more bullish. We are ending the day at the day's high, and also testing the next topside target area (at highs from the week of Jan 23rd between 1.0764-74). The buyers remain in control. A move above the 1.0774 will look toward the high for the year at 1.0823.
Technically for the GBPUSD today, the sharp rise higher on the back of the BOE statement, has seen the price move above the 50% of the move down from the Feb 24th high. That level comes in at 1.2338. The low price in the NY session after the BOE spike higher moved to 1.2336. Support held where it should have held. That level (at 1.2336) becomes the GBPUSDs line in the sand going into the new trading day. Stay above is more bullish. Move below and we could see some selling. On the topside, the 100 day MA is up at 1.2404. Buyers are in control in this pair but look for sellers on a test of that 100 day MA.
The SNB kept rates unchanged today. The decision had little impact but the technical trend to the downside continued for the pair. The price decline has taken the pair down to the 50% of the move up from the US election day low at 0.9945 (the low reached 0.9950). That level will be a key level in the new trading day (click here for a technical look at the USDCHF).
The USDJPY spent the day doing more watching, but it did find buyers near the 100 day MA at the 112.98. In the early London session, the MA was broken on the way to the day lows at 112.89. The price quickly rebounded. In the NY afternoon session, the price dipped to a low of 112.96 (two pips below the level) and once again buyers took the price higher. The 100 day MA come in at 113.06 in the new trading day. It remains a key support level in the new trading day. Although support held nicely, the topside was limited. There is resistance above at the 113.46 to 113.59 area. The level corresponds with the 50% of the move up from the Feb 28th low and the 200 bar MA on the 4-hour chart (see post here).
Below is a snapshot of the % changes of the major currencies vs each other. The is the strongest currency for the day, while the is the weakest.
