Forex news for North American trading on July 12, 2018
- Fed's Powell: I sleep pretty well on the economy right now
- US June CPI +2.9% vs +2.9% y/y expected
- US June monthly budget statement -$74.9 vs -$80.0B expected
- Fed's Harker: Open to four hikes this year if inflation accelerates
- Irish foreign minister: A 'no deal' Brexit is a 'very, very unlikely outcome'
- Treasury Sec Mnuchin: Trump is very focused on free and fair trade
- Canada May new housing price index 0.0% vs +0.1% m/m expected
- US June CPI +2.9% vs +2.9% y/y expected
- US weekly initial claims 214K vs. 225K expected
Markets:
- Gold up $5 to $1246
- WTI crude down 20 cents to $70.18
- S&P 500 up 24 points to 2798
- US 10-year yields flat at 2.85%
- AUD leads, CHF lags
The CPI report was the main event of the day and it left the USD bulls a bit disappointed. Unrounded, the numbers were on the soft side and the m/m reading missed. That helped the euro to recover its 25-pip loss on the day. It eventually rose to a high of 1.1695 into the London close but couldn't get past the figure and retreated to unchanged at 1.1675.
The underlying theme was the continued breakout in USD/JPY as it busted through 112.50 in the second day of a breakout. The retracements were small as it hit 112.63 then peeled back to 112.50.
USD/CHF also made a nice 65 pip gain and rose above parity from a low of 0.9948 on the day.
Cable initially fell on the Brexit white paper and hit 1.3181 but the weakness didn't last as it climbed on US CPI and hit 1.3240 before sliding late in the day to unchanged at 1.3210.
Oil weakness was another theme as WTI fell as low as $69.23 and the lowest since June 26. That retraced half the June-July rally but it found support near that 50% level and rebounded to $70.22.
USD/CAD wasn't bothered much by oil (unlike Wednesday) as it chopped around 1.3164. Part of that was the pull of a weak USD and push of oil so it leveled out.
AUD/USD was a bit more buoyant in a steady rise to a high of 0.7420from 0.7373 at the start of US trading.
