Forex headlines for March 26, 2014:
- February US durable goods orders 2.2% vs 1.0% exp m/m
- Cap goods orders non def ex air -1.3% vs 0.5% exp, prior revised lower
- March US Markit services PMI flash 55.5 vs 54.0 exp
- Fed rejects capital plans of several megabanks
- French jobseekers rise 31.5K vs 2.4K expected
- ECB’s Linde says Spain’s economy slowly recovering from recession
- Bank of Portugal raises 2014/2015 GDP forecasts
- RBA may quit trying to talk down Australian dollar – McCrann
- Morgan Stanley stopped out of USD/CAD trade
- Gold down $8 to $1303, touches $1298
- WTI crude up 98-cents to $100.18
- S&P 500 down 13 points to 1852
- CAD leads, EUR lags
The market was treading water despite soft core durable goods orders. The trouble really began with the extremely strong bond auction. That made some other market participants think someone knew something they didn’t and yields. USD/JPY was the next to roll over. The pair was trading around 102.35 but early in the US afternoon began to slide and from there it was cascading stops including a bust through 102.00 to the lowest in a week. The stress test results sparked another wave of selling down to 101.88.
The Canadian dollar was a standout performer and you get the sense that stop-loss selling in USD/CAD was part of the reason. Just yesterday Morgan Stanley recommended longs at 1.12 with a stop at 1.11. The low today was 1.1081. They certainly weren’t the only one in the trade — CFTC data shows the loonie is the most-disliked currency.
Cable rose to a one week high in US trading. Initially it stalled at Thursday’s high of 1.6567 but eventually broke through and continued to 1.6597. Offers at the big figure eventually halted the rally. Last at 1.6578.
EUR/USD was sidelined. The pair generally followed the ebb and flow of risk appetite and USD sentiment but it was in such a tight range that it was almost insignificant. The pair chopped between 1.3780 and 1.3810 about a dozen times. Last at 1.3784.
The Australian dollar hit a session high at 0.9245 in early US trading and then consolidated sideways. The ‘risk off’ mood didn’t hurt badly, which is probably a good sign. Last at 0.9224.
