Forex headlines for Sept 10, 2014:
- Referendum: Daily Record has 53% for No, 47% for Yes
- SNB’s Moser says negative rates remain an option – WSJ
- SNB will take extra measures if needed says Meier
- BOE’s Carney: Point where rates need to rise has moved closer
- BOE’s Miles comments that there is no immediate urgency to start normalising policy
- BOE’s Miles – UK recovery not being driven by consumer credit
- MPC hawk Martin Weale says he sees inflation pressure stronger than central forecasts
- July 2014 US wholesale inventories 0.1% vs 0.5% exp m/m
- QE will only come if inflation remains very low for too long says ECB’s Mersch
- Demand an issue in weak bank lending says ECB’s Praet
- ECB may need QE to boost growth says IMF
- Q2 2014 Canadian capacity utilisation 82.7% vs 82.9% exp
- WTI crude down $1.01 to $91.76
- Gold down $5 to $1249
- GBP leads, JPY lags
- S&P 500 up 7 points to 1995
Cable finally bounced as a pair of polls showed the No side pulling back ahead with a week to go until the Sept 18 referendum. The rebound stalled out just ahead of the gap at 1.6233 and that’s the important level to watch if any rebound continues. In any case, it’s an impressive turnaround from 1.6050 and a long-overdue bounce. The question is: Do you buy it or sell it? Part of it depends on whether you think Scotland will separate but there could be a few acts in the play first.
The other headline-driven move with in EUR/CHF. Officials didn’t really say anything new and just reiterated things that had already been on the table but negative rates are a tax on money in CHF and that sparked a quick move to 1.2118 but it’s since slid back to 1.2098.
USD/CAD ramped up to 1.1000 in Europe but it was a one-way trade lower all the way to 1.0938 and finishing at the lows of the day. What do you do with something that broke major resistance in the last two days only to bust lower? Tough call.
USD/JPY is turning into one of those quiet bull markets. It climbed another 30 pips today and finished at the highs at 106.86. Next thing you know it will be at 110.00 and everyone will be wondering how they missed the trade. What’s especially impressive is that selling hardly struck when stocks slipped early in the day.
The Australian dollar was quieter today but showed a faint pulse after a trip down to 0.9114 in Asia. It slowly climbed to 0.9158 but remains under the 200-day moving average.
