Forex headlines for July 24, 2014:
- US initial jobless claims fall to lowest since 2006
- July 2014 US Markit manufacturing PMI flash 56.3 vs 57.5 exp
- IMF cuts 2014 global growth forecast to 3.4% from 3.7% prior
- IMF cuts US growth to 1.7% from 2.8%
- Full IMF projections
- US June new home sales 406K vs 475K expected
- Missing Algerian plane crashed in Mali
- Ukraine Prime Minister Yatsenyuk resigns elections likely
- Espirito Santo Financial Group seeks creditor protection
- Italian PM Renzi says it will be “very difficult” to meet 0.8% govt growth target
- Caterpillar reports higher Q2 profit and increases proft per share outlook
- EU sanction plans focus on private Russian debt and equities but not government debt
- IMF’s Blanchard says US growth is reasonably strong looking ahead
- Gold down $12 to 1992
- WTI crude down $1.13 to $101.98
- US 10-year yields up 5 bps to 2.51%
- S&P 500 up 1 point to 1987, hits record 1991
- USD leads, NZD and AUD lag
US dollar strength was the story in New York trading and it came in a nice, gradual wave with USD/JPY griding out a steady 30 pips gain. Last at 101.77.
EUR/USD was at a high at the start of the session at 1.3485 following on the heels of good PMI numbers but it was a slide from there, down to 1.3465, kicked off by the jobless claims numbers and undeterred by the weak housing starts numbers.
The pound was a dog as it broke below 1.70 and hit as low as 1.6967 before catching some bids and slowly climbing back to 1.6988.
The US dollar did some damage against the commodity currencies with USD/CAD finding its way to 1.0744 from 1.0720. AUD/USD slipped down to 0.9421 from 0.9445.
The driver for the dollar was a rise (finally) in Treasury yields. It wasn’t anything spectacular but the jobless claims numbers are yet another reason for the Fed to ease off the gas pedal.
