Forex news for North American trading on September 21, 2018:
- May: EU and UK a long ways apart on two big issues
- Canada August CPI +2.8% vs +2.8% y/y expected
- Canada July retail sales 0.3% vs. 0.3% est.
- CFTC commitment of traders: The GBP shorts increase to highest level since May 2017
- Saudi Arabia worried about oil prices above $80
- Baker Hughes US oil rig count 866 vs 867 prior
- OPEC and non-OPEC production declined in August but discussing 500kbpd increase - report
- US September prelim Markit services PMI 52.9 vs 55.0 expected
- White House's Hassett: Getting 'very, very close' to NAFTA with Mexico, not Canada
Markets:
- Gold down $9 to $1198
- WTI crude up 53-cents to $70.84
- S&P 500 flat at 2930, up 0.9% on the week
- US 10-year yields flat at 3.06%
- Ripple jumps 77% in a day, passes Ethereum as second-largest cryptocurrency
- CHF leads, GBP lags
- On the week, NZD leads, JPY lags
When you take a look at the net changes on the day it's bland except for the huge move in sterling, which was its largest fall in months. It started yesterday with Macron's criticisms of Brexit and escalated with some over-the-top UK press coverage and the mood deeply soured. For some reason May tried to battle back but her effort couldn't stop the bleeding. It was a one-way move down to 1.3056 from 1.3287 with about half coming after New York arrived. After the flurry of selling early, cable flattened right out.
EUR/USD came under some selling pressure as the US dollar found a modest bid, in part on the Brexit worries. It tracked down to 1.1733 from 1.1803 with the final 30 pips coming as New York arrived. It chopped from there, bouncing to 1.1765 then back near the lows before finishing near 1.1755.
USD/JPY chopped lower, losing about 20 pips in what was basically a reflection of the risk trade. Stocks had been higher then finished flat while bonds were quiet.
USD/CAD was a focus with some top tier data on the agenda. The headlines matched estimates but the underlying numbers were a tad stronger. USD/CAD reacted strongly in a quick move down to 1.2887 where it ran into support from Thursday's low. It bounced as high as 1.2942 on reports the White House is unhappy with NAFTA and prepared to fly solo. Ultimately, USD/CAD finished at 1.2920, up slightly on the day.
NZD and AUD finished the day unchanged. Some consolidation is a victory after climbing for four days to start the week.
Have a great weekend.
