Forex news for New York trade in October 5, 2017:
- August US factory orders +1.2% vs +1.0% expected
- US August trade deficit $42.4 billion vs $42.7 billion expected
- Canada August international merchandise trade balance -$3.41 billion vs -$2.60 billion
- Initial jobless claims 260K vs 265K expected
- Fed's Williams: Sees inflation rising to 2%, says Fed is able to hike
- Spain's constitutional court suspends Monday's Catalan parliamentary session - report
- Fed's Harker: Still penciling a December rate hike
- Harker: US essentially at the point of maximum employment
- Trump plans to announce he will 'decertify' Iran nuclear deal, send to Congress - report
- TD abandons October Bank of Canada rate hike call
- ECB considering "concrete legal restrictions" on ICOs
- Goldman Sachs bumps Q3 GDP estimate to 2.0% from 1.8%
- Madrid to pass decree-law Friday that would let bank move without shareholder meeting
- French official GDP estimate revised to +1.8% from +1.6%
- BOE's McCafferty: Sept BOE minutes reduced risk of an "unpleasant surprise"
- Senate votes to confirm Randall Quarles to Federal Reserve
- Fed's Williams: We don't necessarily need more inflation to hike this year
- Japan's Abe says interest rates at 3-4% would make fiscal situation hard
- ECB Minutes: Policy should be highly accommodative under all scenarios
Markets:
- S&P 500 up 14 points to 2552
- US 10-year yields up 2 bps to 2.34%
- WTI crude up 77-cents to $50.74
- Gold down $7.50 to $1267
- USD leads, GBP lags
The pound was battered on talk of a Conservative revolt against the struggling leadership of Theresa May. It was a swift, unrelenting drop of more than 130 pips. Much of it came before US traders arrived but it culminated in a slip below the 61.8% retracement of the Aug-Sept rally.
EUR/USD was also under pressure that was more a story of a strong US dollar. The factory orders report was good and there's talk that wages could be a skewed higher in tomorrow's non-farm payrolls report. EUR/USD finished at the low of the day at 1.1705.
USD/JPY was lifted by higher Treasury yields and another record in the stock market. Aside from the solid US data, Congress took a procedural step towards tax reform and the market is licking it chops.
The big loser in New York trade was the Canadian dollar after a weak trade balance report. I mean, it wasn't that weak but it's one of the first reports with a strong CAD and the market thinks that means more trouble to come. USD/CAD rose more than a full cent and hit 1.2585 at the highs.
AUD/USD was dragged down by the strength of the US dollar. It finished at the lows of the day, down 70 pips to 0.7793 to erase the last two days of gains.
US and Canadian jobs are due Friday, so strap in.
