Forex news for January 13, 2016:

  • Beige Book: Wage pressures subdued, overall price pressures minimal
  • US December monthly budget statement -14.4B
  • Why the Fed is making a terrible mistake - Martin Wolf
  • US weekly EIA oil inventories +234K vs +2000K expected
  • SNB's Zurbruegg: Haven't seen CHF safe haven flows
  • Fed's Rosengren: Data raise possibility US growth may be slowing
  • Fed's Rosengren: ECB negative rates as the Fed hikes complicates things
  • Canada Dec Teranet house price index -0.1%
  • Kaplan wants to see evidence of inflation in the next 2-3 years
  • Markets are going to go up and down says Dallas Fed's Kaplan
  • Gold up $7 to $1094
  • WTI crude oil up 20-cents to $30.65
  • S&P 500 down 48 points to 1890
  • US 10-year yields down 2 bps to 2.09%
  • EUR leads, CAD lags

What started out as a modest rally in US stocks turned into a brutal rout with little warning. Tech stocks started a bleed lower that escalated to a 3.4% drop in the Nasdaq.

The worsening sentiment put a bid into the yen but the euro also benefited on a growing sense that the Fed may back off from hiking rates. EUR/USD started US trading near the lows of the day at 1.0805 and steadily climbed to 1.0888 before slipping back to 1.0875 late.

USD/JPY had struggled to climb above 118.35 in Europe and Asia. The repeated failures to get above were a telltale sign and the pair sank back to 117.70. Despite the worries, it remained well above the 117.25 low from Tuesday.

The real damage was in the commodity currencies once again. AUD/USD was in the midst of a a strong session as it looked like worries were beginning to fade. It traded near 0.7020 early but sentiment unwound in a steady but deeply negative way and knocked the pair down to 0.6950. Tuesday's low of 0.6940 is in focus with the jobs report due up later.

The Canadian dollar fell to a fresh 12-year low as oil reversed lower on another massive build in gasoline and distillate supplies. USD/CAD rallied to 1.4350 from 1.4215.

Cable didn't make a fresh foray below the previous day's low. It even looked like it might gain for much of the day but it couldn't climb above 1.4460 and then skidded down to 1.4405 late, falling 40 pips in another day of losses.