Forex news for New York trading on May 3, 2017
- Federal Reserve holds rates at 0.75% to 1.00%
- The FOMC statement for the May 2017 meeting
- Fed hike probabilities before and after today's statement
- April ISM non-manufacturing index 57.5 vs 55.8 expected
- April 2017 US ADP employment report 177k vs 175k exp
- Markit April final services PMI 53.1 vs 52.5 expected
- IFOP French election poll sees Macron stretch his gain
- US weekly crude oil inventories -930K vs -3000K expected
- EU's Juncker says he has noticed May is a "tough lady"
- US Treasury studying possibility of issuing ultra-long bonds
- Mnuchin: Housing finance reform will be focus of second-half of the year
Markets:
- Gold down $15 to $1240
- WTI crude up 14-cents to $47.78
- US 10-year yields up 4 bps to 2.32%
- S&P 500 down 4 points to 2387
- USD leads, AUD lags
The dollar got good news and more good news on Wednesday. The ADP numbers were in line with estimates so that was a push. The first boost came from a very strong ISM non-manufacturing report that included the best new orders in years. The market was hesitant to buy dollars ahead of the FOMC so the reaction was minor at the time. The Fed decision didn't give any overt hints but it brushed off soft Q1 growth so that was seen as clearing the way to a June hike. At a 93% probability, it looks overdone to me but I won't challenge the wisdom of the market.
USD/JPY initially kicked a dozen pips lower to 112.25 on the FOMC statement but quickly recovered and finishes near a session high and six-week high at 112.68.
It was a broad US dollar move as it made good gains versus the euro and pound as well. EUR/USD chopped around 1.0915 until the Fed and then slipped down to 1.0890.
The odd war of words between May and Juncker continued but that wasn't a factor for GBP as it cooled down to 1.2875 from 1.2920 in the pot-Fed pop. The move broke an intraday double bottom and is nearing Tuesday's 1.2864 low. Watch for stops on a break.
USD/CAD is narrowly higher but that will mean a ninth-straight session of gains. the pair was bounced around by oil and tried below 1.37 twice but the late USD strength boosted the pair to 1.3723. On the crosses it was a good day for CAD as it generally kept pace with the big dollar.
That wasn't the case for its commodity cousins. NZD was helped by a great jobs report but was still hammered nearly 1% lower. AUD/USD didn't get any help and fell more than 100 pips to the lowest since mid-January. It wiped out three days of gains in the process.
