Forex news for US trading on November 21, 2016:
- Draghi says recovery proceeding at moderate pace
- Higher rates are a sign of confidence for the future: Fed's Fischer
- Fischer: Fiscal policies could relieve the Fed of being the only game in town
- October 2016 US Chicago Fed national activity index -0.08 vs 0.00 exp
- Canada Sept wholesale trade sales -1.2% vs +0.5% expected
- ECB's Villeroy: Brexit and Trump victory has increased uncertainty
- Libya OPEC Governor says first day of technical talks went well
- OPEC experts making "some progress" - report
- ECB's Coeure: When Europeans act together they are stronger
- Belgian consumers are feeling a bit better
Markets:
- Gold up $4 to $1212
- WTI crude up $1.80 to $47.49
- US 10-year yields down 3 bps to 2.33%
- S&P 500 up 15 points to 2197
- GBP leads, USD lags
The dollar finally took a break on Monday but few currencies were really able to take advantage. Oil helped CAD and the New Zealand dollar caught a bid but the only big winner was the pound as EUR/GBP broke down.
Cable was lower in early European trading but slowly climbed upwards and then busted upwards as 1.24 broke. The move extended all the way to 1.2511, which was the best in six days. The pound is now the lone currency higher against USD since the election.
OPEC chatter was behind the 4% rally in oil and 100 pip drop in USD/CAD. The pair was mostly unchanged early but sank as North America arrived and crude inched higher. USD/CAD selling peaked at the London fix with a low of 1.3387 and then bounced towards two tests of 1.3450 that both failed.
Stocks were another big story as the S&P 500 hit all-time intraday and closing highs in a powerful rally that helped the US dollar off the lows. In truth, the tiny pullback in the dollar could hardly even be called a dip.
USD/JPY finished the day up a handful of pips at 111.00 after touching below 110.50 early in US trading. The stock recovery and higher US 2-year auction were part of the reason for the climb. The pair has risen in 10 of the past 12 days. Update: An earthquake and tsunami near Fukushima quickly sent the pair down to 110.61 from 111.00.
EUR/USD didn't get any help from Draghi or the other ECB cast of characters. They all helped to confirm that some kind of QE extension is coming in December. Earlier there was some sense of relief as Merkel said she will return and Filion looks to be the French conservative candidate but that faded in a 40-pip dip down to 1.0579. In the final hours of trading there was a bounce up to 1.0630 so the pair managed a 40-pip gain on the day.
