Forex news for New York trade on June 19, 2019:
- Federal Reserve holds rates in range of 2.25%-2.50%, as expected
- Powell Q&A: Committee 'wants to see more' before cutting rates
- Powell: We made some 'significant' changes to our statement
- Fed central tendencies and dot plot for June 2019
- FOMC full statement for June 2019 meeting
- Italy drafts up law to take over over central bank appointments - report
- Global Times Hu Xijin: People around me are less optimistic than back in December
- No comments on monetary policy from Draghi in closing remarks at Sintra
- Lighthizer: Ready to work with Democrats to work out USMCA deal
- Canada Teranet/National Bank HPI for May 0.5% vs 0.0% last
- Canada May CPI +2.4% y/y vs +2.1% expected
Markets:
- S&P 500 up 13 points to 2930
- WTI crude up 49-cents to $54.39
- US 2-year yields down 11 bps to 1.75%
- US 10-year yields down 2.5 bps to 2.03%
- Gold up $6 to $1352
- GBP leads, USD lags
US dollar selling was the theme early and it continued through an FOMC decision that was expected to be dovish and delivered. The US dollar fell 30-40 pips across the board on the statement but gave some of it back later, despite a sharp drop in front-end yields.
Cable was particularly strong ahead of tomorrow's BOE decision. It has rebounded from a five-month low in a one-way, 150 pip climb from support at 1.2500. It added to the gains on fixing demand and the FOMC before stalling late.
CAD had three things going for it: 1) Higher CPI 2) Tighter US oil inventories 3) Dovish Fed. That combined to send USD/CAD down to 1.3284 and a close on the lows. It was just behind the pound as the top performer.
AUD was much less of a mover as it tried to rally on the Fed but was sucked back down on expectations the RBA will go cut-for-cut with the Fed. NZD followed a similar pattern.
Draghi didn't make any news today but the euro fully recovered from this week's dip on his loosening talk. EUR/USD made the high of the day immediately after the FOMC statement and then faded.
Gold finally managed to close above $1350 as it hit fresh highs late at $1358 in what looks like it could be a technical break to the upside.
