Forex news for US trading on March 29, 2016:
- Yellen: Caution in raising rates is 'especially warranted'
- Yellen Q&A: Domestic economy has progressed in 'remarkably satisfactory' way
- In her own words: Six highlights from Yellen's New York speech
- UK Brexit: Poll shows 45% want to leave, 41% to stay
- Fed's Kaplan: Consumer will remain strong this year despite weak retail sales
- There's no signs of a US recession this year says Fed's Williams
- US March consumer confidence 96.2 vs 94.0 expected
- ECB bought €10.345bn vs €12.406bn prior in latest QE count
- January 2016 US Case/Shiller 20 city HPI 0.8% vs 0.7% exp m/m SA
- Iran to join the Doha meeting but will not be part of a production freeze - Livesquawk
- February 2016 Canadian PPI -1.1% vs -0.2% exp m/m
Markets:
- Gold up $19 to $1241
- WTI crude down 84-cents to $38.55
- S&P 500 up 18 points to 2055
- US 10-year yields down 8.6 bps to 1.80%
- NZD leads, USD lags
The market heard from some hawkish regional Fed Presidents in the past two weeks and thought Yellen might change her tune. Instead, she stuck to her dovish FOMC style and the market was caught off-guard and forced to sell US dollars.
Before Yellen, trading was subdued aside from some mild bids in commodity currencies and mild GBP strength. The majors went into the headlines essentially flat.
The rust of the long weekend kept traders away from jumping in too quickly and the moves developed over a few minutes despite the clearly-dovish headlines. The initial spikes eventually hit 40-70 pips with EUR/USD up to 1.1250 from 1.1200. It eventually added another 50 pips.
The jump and then continued grind on the Yellen headlines was a common theme. USD/JPY immediately fell to 113.00 from 113.40 and then continued down as low as 112.61. AUD/USD rose to 0.7600 from 0.7570 and then slowly ramped up to 0.7640.
The New Zealand dollar was a star on the day, finishing 2% higher as it broke out technically in early US trading to 0.6800 from 0.6750 and then continued another 50 pips higher after Yellen.
USD/CAD bucked the oil trend as it plunged down to 1.3100 from 1.3155 and then extended the decline to 1.3050.
Just in the past 30 minutes, the US dollar has shown some signs of stabilizing but most pairs are slated to close near the extreme levels of the day.
It's a busy economic calendar all week so stay tuned.
