Forex news for US trading on October 25, 2016
Carney
- BOE's Carney: There are limits to willingness to look through inflation overshoots
- Carney says UK banks have post-Brexit contingency plans at varying stages of readiness
- Carney says monetary policy has been overburdened in many ways
- BOE does not target exchange rate but is not indifferent to it
News
- US Oct consumer confidence 98.6 vs 101.5 expected
- US FHFA house price index Aug mm +0.7% vs +0.4% exp
- August US Case-Shiller 20-city house price index +5.13% vs +5.0% y/y expected
- Richmond Fed index -4 vs -4 estimate
- Weak appliance sales highlight economic softness in US and UK
- Philadelphia Fed wage and benefit cost index Oct 40.5 vs 30.5 prev
- French Sept jobseekers 3490.5K vs 3518.4K expected
- Renzi optimistic for 1% growth this year
- Germany's Schaeuble: Sees growing consensus mon pol has reached limits
- Draghi: We will exit our policies when we've hit inflation targets
- Draghi: ECB committed to preserving policy accommodation
- ECB's Draghi: Other policies need to buttress monetary policy
- Venezuela proposes non-OPEC countries cut 400-500K of production
- Russia against cutting its output: IFX
Markets:
- Gold up $10 to $1274
- WTI down $0.70 to $49.82
- S&P 500 down 8 points to 2143
- US 10-year yields down 0.7 bps to 1.75%
- AUD leads, GBP lags
Someone just waking up might be tempted to look at the GBP moves and the Carney headlines and think he was behind the rebound but that wasn't really the case.
The bottom fell out of cable early in US trading without any headline driving it. There was some talk of a Carney leak or disappointment in yesterday's May/Sturgeon meeting but nothing added up. Stops were hit on the fall below 1.2200 and, once again, no one wanted to be trying to pick the bottom as the pair crumbled to 1.2083. The low was the worst since the flash crash.
But the selling stalled there and cable made a slow recovery all the way back to 1.2200. I would only give Carney credit for the final 50 pips in the rebound on the comment about not looking through GBP weakness indefinitely. That's a hawkish tilt or at least some creative jawboning.
The turnaround in cable fit in with reversals elsewhere. The US dollar was strong early and it climbed to a session high of 104.87 against the yen. But falling yields and poor stock market sentiment along with the soft consumer confidence number weighed on the dollar and it fell to 104.20.
Signs of the turnaround in the dollar also hit EUR/USD as the pair climbed to 1.0905 from a session low of 1.0850, all in US trading. A close at the highs would have put a reversal on the chart but the pair looks to be settled near 1.0885.
AUD/USD was a winner as it climbed to the best levels since last Thursday up at 0.7655 in a reversal from the low of 0.7618.
USD/CAD was still recovering from the miscommunication and clarification from Poloz late yesterday. The pair hit 1.3370 then skidded to 1.3315 only to finish near 1.3350 as oil prices sagged.
