Forex news for January 8, 2015:
- US initial jobless claims 294k vs 290k exp
- November 2014 Canadian new housing price index 0.1% vs 0.1% exp m/m
- December 2014 US Challenger layoffs 32,640k vs 35.940k prior
- Draghi: ECB reassessing monetary policy stance early 2015
- ECB’s Coeure: Oil prices a challenge for ECB inflation goal
- Coeure: Sees signs inflation drop may continue
- Bank of England MPC keeps interest rate unchanged at 0.5%
- December 2014 US Philly Fed revised lower to 24.3 from 24.5
- Redbook: US December same-store sales rose 5.2% y/y
- Canadian PM Harper says will balance budget this year
- New US Senate finance leader has ‘open mind’ on hiking gas tax
- Japan’s cabinet to approve 3.1 trillion yen supplementary budget
- Some Chinese provinces lower 2015 growth targets
- Best forecaster in 2014 sees the euro falling to parity
- WTI crude up 9 cents to $48.75
- US 10-year yields up 4.5 bps to 2.01%
- Gold down $3.20 to $1208
- European stocks rise 2.4 – 3.7%
- S&P 500 up 36 points to 2061
- NZD leads (for 3rd day), CHF lags
The euro carved out a fresh cycle low at 1.1754 as US traders were getting to their desks but it steadily recovered from there, up to 1.1821 before slipping back to 1.1790. Draghi talked about more action in a letter but it was really a re-iteration of things he’s said before.
The larger theme was an ebb in US dollar strength, with USD/JPY testing 1.20 in Asia but later falling back to 119.16. Even downtrodden cable staged a bounce to 1.5118 before giving back 30 pips late.
New Zealand dollar strength has quietly been a big story this week. A good dairy auction earlier in the week helped but yield and the possibility of rate hikes before the Fed are also drivers.
It was a very disappointing day for oil bulls. There were some prospects for a rebound at the start of Asian trading but nothing materialized. The best thing you can say is that a late $1 drop to $48 was quickly erased.
USD/CAD finishes the day near the highs at 1.1840 after touching 1.1800 in Europe. Non-farm payrolls are the marquee event on Friday but Canadian jobs data is due at the same time.
