Forex news for NY trading on July 19, 2018
- Dow's five day winning streak comes to an end
- Crude oil futures settles at $69.46, up $0.70 or 1.02%
- Trump stopped golds run lower. Remember the 200 week MA at $1234
- Trump speaking on CNBC: Not happy about interest rates going up
- European stocks close mostly lower. UK FTSE bucks the trend.
- UK Brexit Secretary Raab says much progress had been made in talks
- US leading index for June 0.5% vs. 0.4% estimate
- Two Euribor traders sentenced to five and eight years in rigging case
- Fed's Quarles says switch to SOFR is ahead of schedule
- Canada ADP June employment report -10.5K vs +2.9K prior
- US July Philly Fed 25.7 vs 21.5 expected
- US initial jobless claims 207K vs 220K est
- The USD is the strongest. The NZD is the weakest as NA traders enter for day
In other markets:
- Spot gold is ending down $-3.93 or -.33% at $1223.50. The price of gold traded down to a new move low $1211.32 on the back of the stronger dollar. Trumps comments on the USD and the Fed, helped to reverse the move. The price remains below the $1234 level which is the 200 week MA (see post here).
- WTI crude oil futures are trading at $69.58 up $.82 or 1.19%. The price rebounded after reports that Saudi Arabia was unlikely to increase production over the next few months.
- Bitcoin is trading up $86 and $7421. The digital currency remains below its 200 day moving average at $7613.60. Staying below keeps the bears happy. A move above should lead to more of the momentum
In the US that market, yields were lower with the 5 year having the largest decline. The 2-10s spread came in by 0.8 bps to 25.1 bps.
European 10 year yields were near unchanged or lower at the close of their trading day. The UK 10 year moved the most (down -4.1 bps) after weaker retail sales today).
A review of the economic releases today saw the US initial employment claims come in at the lowest level since December 1969 (I was alive then. Adam was most definitely not). The level came in at 207K vs 220K estimate. Employment is not a problem in the US. Having skilled labor is the problem. To address that, Pres Trump announced a "Pledge to Workers" program (spearheaded by his daughter Ivanka), that involves US corporations signing a pledge to retrain workers for the "new economy". Of course it is easier said then done, but needed.
Also better than expected was the Philly Fed index which came in at 25.7 vs 21.5 estimate. The index erased some of the large decline last month.
In other US data, the Leading index increased by 0.5% vs 0.4% expected. The index has not been negative since May 2016. So what's all the fuss about the upcoming recession?
The better data in the US sent the dollar higher in early trading. The EURUSD reached a low of 1.1574 - making new month lows (taking out the July 2 low at 1.15906). The GBPUSD fell to 1.29656. The USDJPY rose toward its key 200 week moving average at 113.23 (the high reached 113.17.
Momentum could not be sustained, a modest correction began
The corrective move was controlled until the time when parts of an exclusive interview with Pres. Trump was aired by CNBC. In the interview, Trump complained about the dollar being too low vs the EUR and the yuan. He also said he was not happy about the Fed raising rates, lamenting that he does all this work to stimulate the economy, only to have the Fed tighten rates.
Those comments sent the dollar tumbling lower.
The EURUSD moved from a low of 1.1574 to a high of 1.1677. The pair stalled between the 100 and 200 hour MAs at 1.1663 and 1.1683. The momentum stalled and the price is settling at 1.1641.
The GBPUSD moved from 1.2965 to a NY session high at 1.3049. Like the EURUSD it rotated back toward the middle of the range at 1.3009. That level also happened to be the swing low from yesterday. In the new day it might be a swing level for bulls and bear (at least intraday).
The USDJPY moved from its high of 113.17 (just below the 200 week MA target) to a low of 112.04. The low did take the price below the 200 hour MA for the first time since July 9th, but the run was short lived and the price rebounded and trades at 112.40 at the close.
Overall for the currencies today, the JPY is ending as the strongest currency, while the risk off currencies like the NZD, AUD and CAD were the weakest.
The volatility ranges were also extended as a result of the swings.
For the USD, the currency was still mostly higher with gains vs the NZD, AUD, CAD and GBP, and declines vs the JPY. Versus the EUR and the CHF, the greenback was virtually unchanged on the day after swings higher and lower.
It is Friday now, so wishing the followers in the Far East a happy and safe weekend.