Forex headlines for July 2, 2014:
- June 2014 US ADP employment report 281k vs 200k exp
- US May factory orders -0.5% vs -0.3% expected
- Yellen says Fed trying to identify ‘new threats’
- Gallup US job creation index holds at six-year high
- Libyan rebels strike deal to reopen two key oil ports
- German minister says Ukraine, Russia and France talks have found way to ceasefire
- June Canadian RBC manufacturing 53.5 PMI vs 52.2 prior
- ISM New York 60.5 vs 55.3 prior
- BOE’s Haldane sees a risk that asset prices could be ‘over-egged’
- Chinese Premier Li says it’s getting harder and more expensive to finance firms in real economy
- Yellen: Rates shouldn’t be main tool to ensure financial stability.
- UBS chief currency strategist leaves amidst cost cuts
- Gold up $2 to $1328
- WTI crude down $1.08 to $104.31
- S&P 500 trades in 4 point range, matches narrowest in 20 years
- GBP leads, AUD lags
The US dollar got a boost from strong ADP numbers but aside from a 30-pip rally in USD/JPY the market was mostly playing-wait-and-see ahead of NFP. The headlines hit with USD/JPY at 101.50 after a slide in Europe and the pair immediately rose to 101.70. Offers at the 200dma at 101.75 capped the rally but it eventually broke and we end the day near the highs at 101.82.
EUR/USD similarly fell 20 pips on the headlines but bids ahead of yesterday’s low of 1.3640 held the line and the pair chopped back up to 1.3654 in an impressive display of resilience.
Cable backed off a 5-year high after the ADP numbers but the dip buyers were waiting at 1.7140 and it was a quick trip back to 1.7170. The European high was 1.7177 and that remains the key line.
USD/CAD finally took a break after falling in 8 of the prior 10 days. The Canadian PMI was brushed aside and it was more of a case of an oversold bounce with a reason to buy dollars. Declines Tuesday came on a Canadian holiday and today’s move basically erased that. Last at 1.0668.
The Aussie was on its back foot after the soft trade numbers so it didn’t take much from ADP to send it to the lows of the day at 0.9429. Still, it was able to hold after the spike lower and we finish close to 0.9440.
The trade of the day was in oil. Crude was sagging yesterday and was on its knees again at 104.70 when US inventory numbers showed an unexpected build. That sparked a bounced to $105.50 but the sellers were ready and unloaded crude, selling it down to $104.36, a nearly 3 week low.
