Forex news for October 18, 2016
- September 2016 US CPI 1.5% vs 1.5% exp y/y
- Canadian August manufacturing sales +0.9% vs +0.3% expected
- Cleveland Fed inflation measure trails official data
- ECB fail to follow their own QE purchase rule book
- UK judge reserves ruling in Article 50 suit
- NAHB housing market index 63 vs 63 expected
- New Zealand GDT price index +1.4%
- Saudi Arabia turns on the taps (but not the oil taps)
Markets:
- S&P 500 up 13 points to 2139
- Gold up $6 to $1262
- WTI crude up 78-cents to $50.72
- US 10-year yields down 2.8 bps to 1.73%
- GBP leads, EUR lags
The general theme in New York trading was modest US dollar weakness but it was whippy. The dollar slid after CPI but quickly rebounded, especially against the euro and yen. In the aftermath, the dollar was at the best levels of the day.
But as time wore on, dollar selling increased and USD/JPY fell to 103.75 from a high of 104.20. Notably, the Asian lows in that pair held.
Cable was the story on the day as a solid CPI report and talk of Brexit compromise led to some short covering. It's only a tiny gain in GBP relative to the huge fall but there is suddenly chatter about more to come.
The commodity currencies were generally strong, especially the kiwi. The milk auction wasn't great but it didn't slow down NZD and a positive risk backdrop was a driver.
CAD was caught up in a whippy oil trade and positioning ahead of the BOC tomorrow. USD/CAD fell below 1.3050 briefly then bounced up to 1.3138 but is under pressure now because of a tight US oil inventory report.
