Forex news for North American trade on August 19, 2020
- FOMC minutes: Highly accommodative stance of monetary policy likely needed for some time
- Canada July CPI +0.1% y/y vs +0.6% expected
- Spain and Italy virus cases rise by the most since lockdown lifted
- Expect one or two Atlantic tropical storms by Monday
- OPEC+ draft statement says pace of oil market recovery slower than anticipated
- Apple shares hit the $2 trillion market cap
- US Labor Debt says prelim benchmark revision would cut March employment by 0.1%
- Kudlow: The economy is going to need to rebuild inventories
Markets:
- Gold down $74 to $1928
- WTI crude oil down 5 cents to $42.84
- US 10-year yields up 1.3 bps to 0.682%
- USD leads, CHF lags
- S&P 500 down 13 points to 3375
EUR/USD was in a tight range to start the US trading day and all was fairly quiet in what felt like it would be a mid-August, mid-week, middling kind of day. Instead, that range broke and the US dollar made a big move to the upside, recouping all of this week's losses.
The EUR/USD range bottomed at 1.2925 and it was a three part fall as that break, hitting 1.1831 and closing a dozen pips higher. The final leg lower came after the FOMC minutes showed some reluctance to use yield curve control and fretted about business spending.
It was a similar script right across the board with the Swiss franc particularly hard hit as USD/CHF erased four days of declines and more.
Cable fell 140 pips to erase yesterday's big gain. Both the euro and pound appeared to be breaking out to new levels yesterday but were reeled right back in today. That raises the chances of a false breakout and adds some major intrigue to the remainder of the week.
Another one of the reversals was in USD/CAD after it hit the lowest since January earlier in the day. After touching 1.3133 the pair marched nearly a full cent higher into the close.
Gold sank through US trading and finished on the lows. It tried to stabilize at $1950 and against at $1935 but is now back to $1925, which is just above the old record high at $1920. The resilience of gold on the hiccup Tuesday was impressive but today's drop is a big setback as it falls to the lows of the week.
