Forex news for US trading on January 4, 2017
- FOMC Minutes: Saw gradual rate hike pace appropriate for now
- Ex-Barclays trader becomes first to admit wrongdoing in forex probe
- US vehicle sales numbers far stronger than expected in December
- Mike Pence says solving healthcare and tax reform will take a few months
- Byron Wien releases annual top 10 surprises
- Vancouver home sales volume down 39.4% y/y in December - real estate board
- December 2016 US ISM New York business conditions index 63.8 vs 52.5 prior
Markets:
- Gold up $5 to $1163
- WTI crude up 71-cents to $53.04
- S&P 500 up 13 points to 2271
- US 10-year yields down 1 bps to 2.43%
- CAD leads, USD lags
A total lack of economic data at the start of the day made for subdued trading early but it picked up as the FOMC Minutes rolled around.
The market got the Minutes wrong on the kneejerk as the dollar initially went to fresh lows on the lack of any kind of firm hawkish talk in the report. But in the following moments the dollar erased the move and went in the other direction. USD/JPY tested the session low of 117.05 in the drop but it formed an intraday double bottom there and sprung to 117.75 in the next hour.
But the dollar was unable to keep the momentum despite strength in stocks and it faded back to 117.30 at the close.
Other crosses followed a similar path. EUR/USD touched 1.0500 in the FOMC Minutes jump but hit offers there and quickly fell back to 1.0450 but recovered near the highs late. Cable traded between 1.2300 and 1.2350.
The commodity currencies were the real story of the day, especially CAD as oil tacked on nearly 2%. USD/CAD fell hard in Europe and down to 1.3300. It chopped around there for most of North American trading and traded at a three week low of 1.3282.
AUD/USD is one to watch in the day ahead. It's been a strong performer so far in 2017 and it's pressing up against the session highs.
Another hotspot was the Mexican peso. It broke the 2016 lows as rhetoric morphs into reality. Yesterday Ford cancelled plans to invest South of the border and the peso has been beaten up since, including a nearly 2% drop today.
