Forex news for US trading on April 27, 2016:
- Federal Reserve leaves interest rates unchanged, as expected
- The FOMC Statement for April 2016
- Physical gold demand fell to seven-year low in Q1 - report
- EIA US crude oil inventories +1999K vs +1750K expected
- 10% move in the pound has a 0.75 pp impact on CPI says BOE's Carney
- ECB's Weidmann: You can't build sustainable growth on a pile of debt
- Atlanta Fed GDPNow boosts Q1 forecast to +0.6%
- March 2016 US pending home sales 1.4% vs 0.5% exp m/m
- US March advance goods trade balance -$56.9B vs -$62.8B
- Bank of Italy ready to extend rescued bank sale deadline
Markets:
- Gold flat at $1244
- WTI crude up $1.36 to $45.40
- US 10-year yields down 6.5 bps to 1.86%
- S&P 500 up 6 points to 2097
- EUR leads, AUD lags
The market was tripped up by initial headlines on the Fed touting the removal of lines citing global risks and the improved labor market. That led to a quick initial rise in the US dollar to session highs across the board. Some of the moves exceeded 50 pips but they quickly unwound as traders got a closer looked at the details.
EUR/USD initially fell to 1.1267 from 1.1325 and after some consolidation it slowly regrouped and climbed back.
USD/JPY has been all over the map. It crept higher to 111.30 ahead of the Fed decision. It whipped down to 111.08 and up to 111.75 followed by several smaller gyrations within that range. Last at 111.56.
Cable was under pressure throughout the day in a slow slide to 1.4530 from 1.4600. The Fed dip was down to 1.4475 but quickly erased.
There was extra intrigue in CAD because of the oil market. Traders were anticipating a drawdown in supplies after the API report but there was a surprise build and that send oil $1 lower into negative territory. It pushed USD/CAD up to 1.2640 at the same time from 1.2575. But oil once again steamrolled the negative news and recovered the losses. After the Fed decision it fell again but then hit a new cycle high shortly after.
AUD/USD was the major laggard on the day but the vast majority of the damage was done before US traders arrived. It fell as low as 0.7549 on the Fed and finishes a quarter-cent higher.
The New Zealand dollar is in focus next with the RBNZ due up. The BOJ is later.
