Forex news for North American trade on May 24, 2019:
- April prelim durable goods orders -2.1% vs -2.0% expected
- China premier says will expand tax cuts to stimulate economy
- Boris Johnson says will of the people "can and must" prevail on Brexit
- Global Times editor: Believes there will ultimately be a deal...but losses aren't big enough
- Baker Hughes weekly US oil rig count 797 vs 802 prior
- NY Fed GDPNow Q2 forecast lowered to 1.4% from 1.8%
- Goldman Sachs sees higher chance of no-deal Brexit after May's departure
- Credit Suisse sees "very high" chance of UK general election
- Atlanta Fed Q2 GDPNow forecast bumped to 1.3% from 1.2%
- Dutch PM Rutte says UK withdrawal agreement is not up for renegotiation
- Belgian May business confidence -3.6 vs -3.2 prior
- CFTC Commitments of Traders: Specs pile into bets against sterling
- The Swiss franc was the top performer this week while the pound lagged
Markets:
- S&P 500 up 4 points to 2826
- US 10-year yields flat at 2.32%
- Gold up $1.50 to $1285
- WTI crude up $1.02 to $58.92
- NZD leads, USD lags
The big story on the day is the resignation of Theresa May and a UK leadership race that will start next month and end in July. The pound wasn't sure what to do with it as the first inclination was higher but then it all evaporated. The low came on Boris Johnson touching on the possibility of a no-deal Brexit. However the US dollar selling kicked in after weak durable goods orders and that helped to spark a reversal to 1.2730 from 1.2650 at the low.
The other story was worsening sentiment. Stocks started higher but with a long weekend looming some selling in stock markets hit and that weighed on USD/JPY. It had been chopping around 109.65 but slid to 109.30.
As the day wore on the US dollar continued to struggle. Some of that was economic worry as GDP downgrades rolled in and fears mounted about the trade war. EUR/USD took advantage by climbing 25 pips and the commodity currencies made some headway.
USD/CAD was lower with oil finishing near the best levels of the day. It looked like a deal-cat bounce as an initial 1.8% bounce was snuffed out but a second wave of buying lifted crude late and USD/CAD slipped to 1.3435.
AUD/USD finished a solid week on a strong note with a 30 pip rally to 0.6928.
Monday is a holiday in both the UK and US so it will be a quiet one (or at least it should be). Have a great weekend.
