Forex news for NY trading on January 30, 2019
- Powell Q&A: We view the baseline as still solid
- Powell opening statement: We have seen cross-currents and conflicting signals
- USD falls after FOMC decision. Stocks soar.
- Redline of the January 30 FOMC statement
- The FOMC statement from the January 2019 meeting
- Federal Reserve leaves rates unchanged at 2.25-2.50%, as expected
- BAML: We are skeptical Fed will be as dovish as the market expects
- Italian stats agency says GDP numbers weren't leaked to anyone
- Permanent customs union would be the cost of removing backstop - report
- European equity close: UK leads the way without GBP help
- WTI extends further to $54.80 and breaks the Dec high
- May and Corbyn had 'useful exchange of views', agreed to meet again
- US weekly crude oil inventories +919K vs +3150K expected
- Jucker repeats that withdrawal agreement won't be renegotiated
- US December pending home sales -2.2% vs +0.5% m/m expected
- Treasury refunding: No rise in nominal coupon sales, plans increase in TIPS
- US January ADP employment change +213K vs +181K expected
- A snapshot of the markets as North American trader enter for the day
- Germany January preliminary CPI -0.8% vs -0.8% m/m expected
- US MBA mortgage applications w.e. 25 January -3.0% vs -2.7% prior
In other markets, a snapshot near the close of day is showing:
- Spot gold is up near $7 or 0.53% at $1318.70. Today, the lower dollar from the FOMC decison is sending the price higher. Before the FOMC decision, gold was trading at $1310.50. The high after the decision reached $1323.70 before rotating back down
- WTI crude oil futures are trading up $1 or 1.8% at $54.28. The price of crude oil is being supported by Venezuelan sanctions, the polar vortex in the US and a lower dollar
The day was dominated early by a stronger dollar and higher stocks. The stock move higher was helped by better earnings from Boeing and Apple (especially Boeing). In the US morning session, ADP employment change did not stop the early momentum. It showed an above estimate gain of 213K vs 181K estimate.
Later, pending home sales continued to showcase the weaker housing data. It fell -2.2% vs 0.5% estimate. Mortgage applications were also weaker today at -3.0% which came on the back of -2.7% last week. Housing remains the blight of the economy, while the employment remains the bright spot.
The market settled down as traders awaited the FOMC decision at 2 PM ET. At the time of the decision, the dollar was stronger vs the
- EUR by about 17 pips,
- JPY by about 14 pips.
- CHF by 45 pips
However, it was lower vs the
- CAD by 60 pips, and
- AUD by 39 pips.
Against the GBP and NZD, the greenback was little changed just before the Fed decision.
In the stock market, the major indices were higher by off the highest levels. Even so, the
- S&P was up 20 points,
- Nasdaq was up 87 points, and
- Dow was up 255 points
The headlines from the decision were as dovish as they could be:
- Fed said they will be 'patient' on future moves
- They were prepared to adjust any details for completing balance sheet normalization in light of economic and financial developments
- They characterized economic activity rising at 'solid' rate (a downgrade from 'strong' previously)
- They said they would be have patience on rates in light of global economic and financial developments and muted inflation pressures, and
- That has "balance of risks" removed from statement (used to say 'roughly balanced')
The impact:
- The dollar moved sharply lower.
- Stocks soared
- Gold rose on the weaker dollar
- Yields tumbled.
The final numbers are showing the USD was the weakest currency of the day, while the AUD is ending as the strongest (the CAD and NZD also rose on risk on flows).
IN the US stock market, the
- S&P closed up 41 points
- Nasdaq closed up 154 points
- Dow closed up 434 points
Below are the percentages changes (and low to high ranges) for the major stock indices in North America and Europe.
It was a big turnaround for the USD as the Fed moves to more neutral sooner than expected.
Some technical levels to eye in the new day:
- The EURUSD moved to a high target area in the 1.14847-1.1499 area (see post here) and stalled. The price is trading down at 1.1478 at the close on the profit taking. The pair did race above the 100 day MA at 1.14453.
- The USDCAD stalled its tumble lower at the 200 day MA at 1.31156, and bounced up to 1.3160 (was the swing low from December 3rd). The pair has a new area to trade into the new day. See post: "Tough to pick a bottom, but USDCAD tests a key area"
- The GBPUSD was able to hold support on the downside against the 200 day MA at 1.30514, and later moved above the 100 hour MA after the FOMC decision at 1.3130 level. However, the probe higher stalled quickly and the price rotated back to the below. The pair is settling around the 1.3100 level with no-deal Brexit fears, against a more dovish/less hawkish Fed.
You can read about other technical views for other pairs, by CLICKING HERE
