Forex news for North American trade on June 22, 2018

Markets:

  • WTI crude up $3.68 to $69.22
  • Gold up $3.07 to $1270
  • S&P 500 up 5 points to 2754
  • US 10-year yields flat at 2.90%
  • AUD leads, USD and JPY lag

Trump sent a shock through markets with a threat to impose 20% tariffs on autos from the EU unless European tariffs on US cars are removed. The initial reaction was a drop in EUR/USD to 1.1618 from 1.1652 but it slowly recovered over the subsequent hours to finish near the best levels of the week at 1.1660.

Equities, bonds and the US dollar more broadly also reacted to the tweet, with automotive stocks hit hardest but the effect was short-lived as virtually all of the moves faded in the following hours in another example of how the market is sanguine about trade threats.

The big mover on the day was the Canadian dollar. It was punished for the terrible CPI and retail sales numbers as they sent USD/CAD to a fresh one-year high at 1.3375 in a flash 120 pip climb. However the loonie was saved in part by OPEC as the production hike was reframed as a return to compliance with no clear number on how much more will be pumped. That helped to send USD/CAD all the way back down to 1.3270 in an eventful round trip. Poloz speaks Wednesday.

The other commodity currencies also finished strong with AUD/USD rising to 0.7440 and NZD/USD up to 0.6917.

USD/JPY never fully recovered from the tariff talk as it fell to 109.80 from 110.10 the bounced along the bottom to close at 109.95. Cable also skidded along the lows near 1.3250 in dull action.

Have a great weekend.