Forex news for New York trading on August 25, 2017:
- ECB's Draghi: Global recovery is firming up
- Draghi: Eurozone recovery gaining ground but ECB isn't there yet on inflation
- Yellen at Jackson Hole: Any changes to financial regulations should be 'modest'
- Fed's Powell: Inflation is a little bit of a mystery
- Fed's Kaplan: I've been a strong advocate that we raise rates twice this year
- Fed's Mester: We need to be doing reduction of stimulus, in a gradual way
- Baker Hughes rig count dips in the current week (August 25th)
- Atlanta Fed cuts Q3 GDP tracking estimate
- July US durable goods orders -6.8% vs -6.0% expected
- Gary Cohn criticizes administration on Charlotteville
Markets:
- Gold up $5 to $1291
- WTI crude up 39-cents to $47.82
- S&P 500 up 7 points to 2445
- US 10-year yields down 2.5 bps to 2.16%
- EUR leads, US dollar lags
Yellen-Draghi was the equivalent of Mayweather-McGregor in the forex market but it was more of a dance than a fight. Neither said anything new or surprising. Yellen avoided monetary policy altogether and Draghi repeated things he's said before.
Nonetheless, not saying something sometimes speaks loudly. The dollar sold off as fresh shorts piled in after Yellen got out of the way. Draghi also gave the euro a lift to a fresh 20-month high with some positive nods in his comments.
EUR/USD finishes the day up 120 pips at 1.1920, breaking the August high of 1.1911 and continuing the recovery that started with Macron's first round election win.
USD/JPY hit a high of 109.24 as shorts covered ahead of Yellen but immediately fell to the low of 109.12 afterwards. The risk trade wasn't much of a factor but note that 10-year yields are at a two month low.
Cable scored a rare win in a climb to 1.2870 from 1.2825 as it took advantage of dollar weakness. The high of 1.2889 came late in the day but the market wasn't willing to take on 1.29 with the UK on holiday Monday.
USD/CAD fell for the third day and hit a low of 1.2466. The bulk of the move was US dollar weakness but a bit of oil strength helped the loonie. Note that Wilkins is in Jackson Hole and could talk to reporters.
AUD/USD finished the day 30 pips higher at 0.7936. It was a quick move higher to 0.7954 after Yellen but that was all she wrote as the pair consolidated afterwards.
Have a great weekend.
