Forex news for US trading on May 3, 2016:
- Fed's Williams: Expects GDP to be around 2% in 2016
- Japan fin min says will keep a close eye on FX market
- Germany's Schaeuble doesn't expect any great Greek crisis this year
- There's convincing evidence that QE is not infinite says Fed's Mester
- New Zealand GDT price index -1.4%
- May 2016 US IBD TIPP economic optimism index 48.7 vs 46.5 exp
- ISM New York 57.0 vs 50.4 prior
- US April total vehicle sales 17.4m vs 16.57m prior
- Turns out Poloz does like negative interest rates
- Trump/Clinton Presidential race could be virtually set after Indiana primary, what it means for markets
Markets:
- Gold down $4 to $1287
- WTI crude down $1.10 to $43.69
- S&P 500 up 18 points to 2063
- US 10-year yields down 6 bps to 2.66%
- USD and CHF lead, AUD lags
The headlines were light on Tuesday but the market moves were massive.
In early European trading the US dollar was under heavy pressure but it completely reversed in US trading.
EUR/USD cracked 1.16 for the first time since August on the way up but then plunged down, hitting 1.1501 to finish lower on the day.
Reversals were the theme and it was the same story in USD/JPY as it hit a cycle low at 105.55 only to rip to 106.53 to finally stop the bleeding.
The drivers were unclear. Commodities were soft and there was some risk aversion but there were no good correlations. It's all flows at the moment.
Cable pasted a big reversal on the chart as it hit 1.4770 and then slammed down to 1.4539 in a one-way move throughout North American trading. It's headed for a finish near the lows.
But the moves in GBP, JPY and EUR were a sideshow compared to the commodity currencies. AUD/USD was holding the post-RBA low near 0.7550 as US traders arrived but it quickly broke and it was straight down from there in a slow slide to 0.7486, taking out some noted support around 0.7500.
USD/CAD was almost as dramatic as it hit a trend low at 1.2456 only to reverse to 1.2720 as oil prices fell 2.4%.
All the daily charts are worth a very close look. It's still a long ways from a sign of a US dollar bottom but technical picture is suddenly much more constructive.
