Forex headlines from US trading on January 5, 2016:
- New Zealand Fonterra GDT auction prices -1.6%
- UK's Cameron to allow a free vote for MPs in EU referendum
- Kuroda: Japan is out of the deflationary situation
- US vehicle sales soft in December
- Fed Credit Officers Survey: Special question on high frequency trading
- Former Minneapolis Fed President Kocherlakota keeps fighting the dovish fight
- December 2015 US ISM New York business index 62.0 vs 60.7 prior
- ECB QE count: PSP total €491.2bn vs €486.7bn prior
- OPEC Dec output falls 170K bpd - Reuters survey
- November Canadian producer prices -0.2% m/m vs +0.0% exp
- Gold up $4 to $1078
- WTI crude down 94-cents to $35.83
- S&P 500 up 4 points to 2016
- US 10-year yields flat at 2.24%
- JPY leads, EUR lags
The theme in FX was euro and sterling selling in US trading. The euro slide started when Europe arrived and continued, almost to the minute, that Europe headed for the exits. The decline was from 1.0832 to 1.0710. After Europe went to the pub, it bounced to 1.0750.
The cable decline had a bit more shape as it bounced to 1.4690 from 1.4660 before a fall to 1.4638 and finishing at 1.4676. Still, it finished down 40 pips on the day.
USD/JPY also finished lower for the second day. It slid to 118.78 as US traders arrived but risk trades improved at the same time and the pair bounced to 119.25 from 119.04.
USD/CAD rallied on soft oil prices as crude fell below the late December lows. USD/CAD touched a fresh 12-year high at 1.4020 but finished the day slightly below the big figure.
AUD/USD was under pressure in Europe and hit 0.7135 before a bounce to 0.7160.
It's the second day in a row where trades began to retrace once Europe went home so keep that in mind in the day ahead.
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