Forex news for New York trading on August 25, 2017
- US stocks end little changed/mixed.
- Pres. Trump: Will speak to Congress about paying for recovery efforts
- USDJPY: Stuck around its range lows. What's next?: Barclays
- Hurricane Harvey weighs on crude oil today. Settle at $46.57, down -$1.30
- US sell $34B of 5 year notes at 1.742%
- Gold breaking above $1300 level. Next target eyed.
- Bundesbanks Weurmelling: Current environment opens the prospect of stopping loose ECB policy
- Oil drop continues on refinery closure. Hits lowest since July 24
- US stocks are higher today, but the Shanghai composite index is breaking higher
- Gold breaks out to highest since November
- Oil falls to lowest since August 17
- Dallas Fed manufacturing index +17.0 vs +16.8 expected
- Trump threatens to 'terminate' NAFTA, says Canada and Mexico being 'very difficult'
- US wholesale inventories for July (P) 0.4% vs 0.3% est
- July US advance goods trade deficit $65.1B vs $64.5B expected
- UK is on holiday but that has not stopped the GBP from being the strongest currency today
In other markets, the snapshot at the end of day is showing:
- Gold is up about $19 to $1310.35. The price cracked the $1300 level on dollar selling.
- WTI crude oil futures are trading down -$1.10 to $46.78.
- US stocks ended the day little changed and mixed.
- US yields are little changed as well. 2 year 1.325%, down -0.6 bp. 5 year 1.7385%, -1.8 bp. 10 year 2.157%, down -0.8 bp. 30 year 2.7554%, +0.8 bp
The markets in the US session had a couple of diversions. One was the London summer bank holiday. That took liquidity out of the market. The 2nd was the impact of hurricane Harvey. Lots of focus was on that and the potential that it might keep the Fed on hold longer. A third influence was the aftermath of the Jackson Hole speeches from Yellen and Draghi. For Yellen, she did not mention/speak to monetary policy. The market took that as more dovish for the dollar. Similarly, Draghi did not speak to the the much stronger EUR. That omission - and an improving economic picture in Europe - had traders scrambling to buy the EURUSD on Friday and there was follow through in trading today.
Looking at the winners and losers today, the EUR was indeed the strongest of the major currencies while the CAD (followed by the USD) was the weakest. The loonie lost a little value on the back of sharply lower oil prices, and a technical bounce in the USDCAD (see post about the USDCAD here).
As for the USD, it fell against all the major currencies with the exception of the CAD.
As far as economic news today, the US advance goods trade deficit swelled to a deficit of -65B vs -64B. Both exports and imports were down, making the mix of the number more dollar bearish.
US wholesale inventories were up 0.4%. That was higher than expectations (+0.3%) but the prior month was revised lower (from 0.7% to 0.6%).
The US sold 34B of 5 year notes at 1.742% (vs 1.884% at the last auction). The dealers took the lowest amount on record which is indicative of strong demand. The 5 year yield moved down -1.6 bps on the day and helped contribute to the softer dollar tone.
Gold also contributed to the weak dollar. It rose by nearly $20 in trading today and that helped to keep the dollar under pressure. In the process, spot gold moved above - and closed above the all important $1300 level. That is now risk for longs.
Golds rise also helped the AUDUSD which marched to a high of 0.7972 - just above the 200 week MA at 0.79672. The pair did move just below the key technical level by the close 0.7965. The 200 week MA will be an important bullish above/bearish below barometer for traders in the new day.
Other key stories going into the new trading day.
- The EURUSD inched closer to its own important "natural" resistance level at 1.2000. The high price traded up to 1.1983 before coming off marginally into the US close. Buyers remain in control.
- The EURGBP remains above it's 100 hour MA at 0.9220. Until that MA can be breached, the buyers remain more in control (see post on the pair here).
- The USDJPY stalled against its 100 and 200 hour MAs at 109.32 and 109.38 respectively. The JPY pairs are getting smashed on the back of a No. Korea missile launch over Japan.
