Forex news for December 10, 2014:
- RBNZ leaves rates at 3.50%, boosts growth forecasts
- Comments from RBNZ’s Wheeler at news conference
- US weekly crude oil supplies rise 1.5m barrels vs 2.2m draw expected
- Saudi oil chief: “Why should we cut production now?”
- US Nov budget deficit $56.8B vs $64.0B expected
- Bank of Canada says housing remains top risk, sees potential for 10-30% drop
- Draft EU summit document shows that Mario Draghi faces a debate delay
- ECB’s Coeure says monetary policy is just one part of policy response
- Russian troops enter Donetsk region at the request of Ukraine
- Latest Greek poll shows Syriza with a 5-point lead
- China’s Big 5 banks raise deposit rates by 20% limit – Securities Journal
- Canadian oil crashes through key level to lowest since 2009
- Breakevens break down
- S&P 500 down 33 points to 2026
- Gold down $5 to $1225
- WTI crude down $2.46 to $61.36, low of $60.43
- NZD and JPY lead, CAD lags
It turns out that Turnaround Tuesday was Temporary Bounce Tuesday as the US dollar gave up yesterday’s late day gains.
Early in the day there was no genuine sign of the trouble to come. S&P 500 futures were a touch lower (and only opened 4 points down) and the US dollar was generally stable. The fright began with high US oil inventories and that started oil selling, then oil-stock selling and then general risk aversion and USD selling.
Sentiment was a bit damaged from the day before and the technicals for the dollar began to look bad when USD/JPY broke below the Asian low of 118.70 and EUR/USD climbed above 1.2400. The 61.8% Fibs soon gave way and the momentum trade was in force.
USD/JPY fell all the way to 117.85 while EUR/USD continues to knock on the door of 1.2450. The other story was the volatility, especially in the yen crosses. USD/JPY was hit by a series of 60-pip whipsaws — the kind your broker loves but can turn a good trade into a loser in a heartbeat.
Keep an eye on 1.1500 in USD/CAD as well. It’s been on the verge of breaking and although the high of 1.1502, there are surely some stops lurking nearby.
Late in the day, the big news was New Zealand where upbeat growth forecasts and a continued hawkish bias from the RBNZ sparked a massive jump in the kiwi.
