Forex news for November 18, 2014:
- October 2014 US PPI final demand +0.2% vs -0.1% exp m/m
- November 2014 US NAHB housing market index 58 vs 55 exp
- Praet: ECB staff has full freedom preparing for additional measures, no taboos
- Fonterra’s GDT price index falls 3.1%
- BOE’s McCafferty: Eurozone growth is a particular concern
- McCafferty: BOE peak rate may be lower than in past
- Fed’s Kocherlakota: Rate rise inappropriate due to low inflation
- ECB’s Knot: There is no deflation
- BOC’s Cote: Should consider higher inflation target
- Japan’s GPIF gets a new CIO
- Putin says that ruble rate is shaped by market forces
- Keystone XL Senate vote to take place at 6:15 pm ET
- Gold up $10 to $1197
- S&P 500 up 10 points to record 2051
- WTI crude down $1.44 to $74.20
- US 10-year yields down 2.5 bps to 2.31%
- EUR leads, JPY lags
The two most notable moves in markets were outside FX. The S&P 500 climbed after 5 days of flat trading and oil resumed its fall. After hitting $76.44, WTI fell back to $74.20, the latest data on supply from the API was very bearish as well.
USD/JPY briefly fell after PPI data, touching 116.33 to nip below the European low but it instantly bounced back and began a climb up to 117.00. A minor double top is beginning to form at the European high and yesterday’s high of 117.05.
The story wasn’t general US dollar strength as it has been recently. EUR/USD found bidders in a few tests of 1.2500 then rallied through the European close up to 1.2540.
EUR/JPY got up to 146.70 and made the first clear close above the 2013 high of 145.69. That’s the best level since 2008 and there is very little major resistance until the 2008 high of 170.00.
Cable rose to a session high of 1.5679 in early US trading but quickly fell back to 1.5630 and closed near the lows of the day. Below 1.5620 it gets dicey with better support at last week’s low of 1.5595.
USD/CAD climbed on oil’s decline but didn’t find as much strength as you might think. The loonie has been surprisingly resilient. After a climb to 1.1320 from 1.1260 the pair sank back to 1.1300.
The big loser was the New Zealand dollar after the milk auction. It was near a session high of 1.7970 ahead of the data and then immediately sank a half-cent to 0.7922. After a bounce it made fresh session lows.
