Forex headlines for July 14, 2014:
- ECB’s Draghi repeats that risks to the economic outlook are on the downside
- Draghi repeats: ECB ready to use unconventional tools within mandate if needed
- Draghi: QE falls squarely within our mandate
- IMF says ECB should consider asset buying if inflation remains low
- IMF cuts its 2014 eurozone GDP forecast to 1.1% from 1.2% in April
- Japan to raise economic view in July report – Nikkei
- Canadian June Teranet/National Bank house price index +4.4% y/y vs +4.6% y/y prior
- Dallas Fed’s Fisher a front-runner for University of Texas jobs – report
- Fed discount rate minutes show directors saw ‘moderate’ growth pace continuing
- WTO rules against US in China steel and solar dispute
- Yellen profile shows a Keynesian from a Bush-hating family
- 2000 here we come in the S&P says Goldman Sachs
- Gold down $30 to $1308
- WTI crude up 12-cents to $100.95
- CAD leads, JPY lags
Markets had a mind of their own on Monday and headlines weren’t part of the story. Stock sentiment improved on Citi earnings and some stability in Portugal’s Banco Espirito but FX largely ignored it.
The larger market moves were all about positioning for the day ahead. It’s a big day for news with Yellen and retail sales on deck and the market shifted into positions for something hawkish. The US dollar was stronger, yields moved up and gold took a thrashing.
Gold first slumped to $1316 but found some support from the recent uptrend but that broke at the the start of US trading and gold fell as far as $1301 in a quick move. Last at $1307 as buying ahead of the big figure helps.
Cable was in tough as the June low of 1.7082 broke but the flurry of selling you might have expected on the break didn’t materialize. The pair hung around 1.7070 and bounced to 1.7090 before settling in the middle.
USD/JPY moved away from the danger zone with a quarter-cent rally on the day up to 101.55. The high came at the London fix at 101.62 in a steady grind. This will be the big mover tomorrow depending on what Yellen says.
USD/CAD tried the upside in the early going but couldn’t get above 1.0747 and slowly sagged to 1.0713. The BOC decision is Wednesday.
AUD/USD was in a range from 0.9387 to 0.9403 as it matched the European high but couldn’t get any higher. The RBA minutes are a highlight in Asia.
