Forex news for March 28, 2019
- US stocks look to close strong after up and down session
- More Fed's Williams: Monetary policy is around neutral
- Mexico's central bank keeps overnight rate unchanged at 8.25%
- WTI crude oil settled at $59.30
- Feds Williams: US economy is in a very good place
- ECB Draghi told EU leaders last week that markets were not fully pricing in no-deal
- UKs Leadsom: Crucial to make every effort to approve withdrawal agreement this week
- US sells $32 billion of 7 year notes at a high yield of 2.281%
- UK Parliament Speaker Bercow says governments motion covers only withdrawal agreement
- European major indices end the day with mixed results
- Brexit: Tomorrow is last chance to lock in May 22 leaving date
- Brexit source: Friday's withdrawal agreement vote on Friday not a meaningful vote 3
- UK May spokesperson: PM May will only bring meaningful vote if realistic chance success
- Kansas City Fed manufacturing index for March 10 vs 0 estimate
- Fed's Clarida: If we have an adverse shock, the first response is traditional policy
- US Feb pending home sales -1.0% m/m vs -0.5% expected
- Fed's Clarida: US is more exposed to global shock due to integration
- German March HICP +1.5% vs +1.6% eexpected
- Oil falls after Trump says OPEC should increase the flow of crude
- US initial jobless claims 211K versus 220K estimate
- US Q4 GDP (third reading) +2.2% vs +2.3% expected
- The DUP isn't in any talks with Theresa May
- The JPY is the strongest while the GBP is the weakest as NA trader enter for the day
IN other markets, a snapshot is showing:
- WTI crude oil moved lower on the back of comments from Trump that OPEC should increase the flow of crude. However, the price rebounded off the low at $58.53 and is trading near the day's high at $59.40. Traders were not influenced by the Pres. remarks (at least for long)
- Gold got creamed today on the back of a higher dollar and a run back below the natural $1300 level. It is trading at $1291.06. The high reached $1315.06. The low extended to $1288.60.
The economic calendar showed:
- 4Q final GDP came in at 2.2% vs 2.3% expected. Inventory higher (not great). Consumption was a little lower. Investment was lower (not that great).
- Initial claims moves back down (211K vs 220K estimate). Good news for job market
- KC Fed Manufacturing index higher at 10 vs 0 but well off the 2018 high at 2016
The other story - which is a daily story - is the Brexit saga.
The lawmakers yesterday could not pass alternative plans. This despite PM May's final play of saying she would step down upon passing of a Brexit deal. So in order to kick the can to May 22nd (and avoid EU elections), the government announced that they would vote on the withdrawal agreement. This was the stated requirement from the EU to get an extension to the later date. The political declaration will be left out, to be voted on down the road. Will that vote pass? There needs to be more horse jockeying. Time will tell.
The anxiety about a no-deal, has the GBPUSD as the weakest of the major currencies today. The strongest currency was the USD, but looking at the % changes, the changes of the major currencies - with the exception of the GBP - vs each other were relatively minor. The change vs the GBP were significant (0.81% to 1.02%). The USD may have been the strongest but it was a GBP day.
Looking at the GBPUSD, the pair corrected into the 100 hour MA at 1.3193 in the Asian session. When the price could not sustain any momentum above that MA line, sellers entered and pushed lower. The Brexit headlines did not help any. The low reached 1.3034 with traders now eyeing the 1.3002-04 lows from March 21 and March 12. Another big day/vote tomorrow with traders likely to keep a lid on the pair unless some deals can be made.
The EURUSD, meanwhile, has now been down 5 of the last 6 days (since the peak on March 20). The high today stallled right at a topside trend line at 1.1259. That trend line is now lower at 1.1243. It the mimimum, it will take a move above that line to tilt the bias higher. Until the, the sellers remain in control. The 1.1174 is the low from March and the year. It also is the lowest level since June 2017.
The USDJPY squeezed higher and above its 200 hour MA for the first times since March 20 (FOMC day). That level could not hold a bid, however, and the price spent most of the NY session below the key line. The price is moving above just before the end of day at 110.649. If the price can stay above with more upside momentum, we could see a run toward a test of 112.00. If not, the 2nd try above the MA, may lead to buyers turning back to sellers with the 100 hour MA at 110.28 as a lower target in the new day.
The USDCAD is closing near the high swing area at 1.3438-43 (trading at 1.3444) and higher on the day, despite oil prices going lower, but then grinnding higher (and near the highs). Typically rising oil, leads to higher CAD (lower USDCAD). Not today thought. Traders will want to see what happens at current levels to gauge the next move. Do sellers lean and push lower (my guess). or do the buyers push toward the next target at 1.3466?
In the US stock market today, the major indices in the US closed higher. In Europe, the results were mixed.
