Forex news for New York trading on March 23, 2016:
- There may be a case to be made for an April move says Bullard
- Fed's Bullard says he's growing concerned about use of dot plot
- Bullard: Central bank can't drive the growth process
- EIA weekly crude inventories 9357k vs 2525k exp
- The great mystery of exactly what Yellen said at the FOMC press conference
- Martin Wolf: Growth via credit continues to tempt China
- Latest New York Fed consumer survey shows increased intentions to borrow
- February 2016 US new home sales 512k vs 510k exp
- ECB's Weidmann: We can't hesitate to normalise monetary policy on budget concerns
- Weidmann says ECB decisions in March went too far
- US MBA mortgage applications -3.3% vs -3.3% prior
Markets
- Gold down $27 to $1221
- WTI crude down $1.66 to $39.81
- S&P 500 down 13 points to 2036
- US 10-year yields down 6 bps to 1.88%
- USD and JPY lead, AUD and CAD lag
The theme at the start of US trading was USD/JPY strength and gold weakness but as other resources began to falter, commodity currencies sank.
USD/CAD made a major push to the upside as oil prices fell 4%. It was a slow, steady climb above 1.32 from 1.3050 and finishing near the highs. The big build in US crude production was part of the reason for the decline.
The AUD/USD trajectory was similar. It was down in European trading to 0.7590 and steadily sank to 0.7520 where it's found buyers a few times but remains perilously close to a session low.
A slight risk-off tone is the other theme. The early USD/JPY strength culminated in a push to a four-day high of 112.90 but it flattened out later and then sagged along with stocks in the US afternoon. It finishes back virtually flat on the day at 112.37.
The euro continues to give back the FOMC move. It is slowly eating into the Fed-spike and has declined for four straight days. An early US move touched 1.1163 followed by a 30-pip bounce. Later selling hit a fresh low of at 1.1157 before another 30 pip bounce. Greg recorded a video arguing for the downside.
Speaking of downside, the pound is now lower than it was before the FOMC. It sank another cent today and will close at the lowest since March 1. Brexit concerns have been weighing but a broader dollar bid also hurt GBP/USD.
Gold took a spill in Asia and then another one in US trading as it touched the lowest since Feb 25. The break of the March low led to some stops. I made the case for a decline yesterday.
