Forex headlines for September 19, 2014:
- Canadian August core CPI 2.1% vs 1.8% y/y exp
- G20 Communique draft: Growth measures will focus on boosting supply
- US August leading indicators +0.2% vs +0.4% expected
- Belgian consumer confidence remains at -11
- Fed’s Fisher: wants to see the first move on interest rates in the Spring of 2015
- Fed’s Fisher “in the slow and gradual school of rate rises”
- Moody’s affirms France with a negative outlook
- United States of America affirmed AAA by Fitch, outlook stable
- UK Aa1 rating affirmed by Moody’s; outlook stable
- Talk of ECB sovereign QE a new theme
- Sarkozy confirms he’s making a comeback
- UK fighter planes scrambled to intercept two Russian bombers
- Salmond calls it a day as Scotland’s First Minister
- CFTC Commitments of Traders
- S&P 500 down 1 point to 2011 after hitting record 2019
- Alibaba IPO grips wall street: Open 92.70, High 99.70, Close 93.89
- Gold down $9 to $1216
- WTI crude down 47-cents to $92.60
- The best trade this week was buying CAD/JPY
- USD leads, AUD lags
The Canadian dollar was a big mover on Friday in New York trading. On the CPI numbers the pair originally bumped up to 1.0980 on the in-line headline data as some mis-programmed algo got caught on the wrong side. It was the core data that mattered and the pair spilled down to 1.0887 in a hurry. That was the lowest since Sept 8 but it didn’t last long as the pair climbed all the way back to square within three hours and then flattened out for the rest of the day.
EUR/USD was in a non-stop bleed. It looks to me like a lot of the safe-haven referendum money was in EUR/GBP and slowly came out. At the same time, talk about what the ECB will do next is beginning as the weak TLTRO sets in. It was a very painful, slow move down and the close was right at the cycle low of 1.2829. Some good news is coming after the French non-downgrade but it’s hard to say if that will be enough for any more than a bounce.
USD/JPY chopped with the risk trade but even when it slid the market was waiting at 108.60 and win finish the week near 1.09. Can 1.10 be far away? I doubt it but the stock market was looking a bit wobbly so keep an eye on that.
Cable. Buy the rumour of the referendum failing and sell the fact. It was a 200+ pip intraday turnaround from 1.6525, there was even a nice intraday double-top to signal the end of the rebound.
The Australian dollar fell to a six-month low as risk trades faded after the referendum and Alibaba excitement wore off. AUD/USD was up as high as 0.8995 but reversed course and stumbled down to 0.8925, closing near the lows. What a putrid two weeks for the Aussie.
Have a great weekend.
FX performance on Friday
Also don’t forget about the New Zealand election on the weekend.
