ForexLive Americas FX news wrap: Cable leaps on talk of extra two years
Forex news for New York trading on October 12, 2017
- The EU may offer the UK a two-year transition period
- September US producer price index +2.6% vs +2.6% y/y expected
- US initial jobless claims 243K vs. 250K estimate
- Canada August new housing price index +0.1% vs +0.2% expected
- Fed's Powell: Gradual Fed policy normalization to continue
- Powell: there is a need to be cautious in comparing dot plot to market pricing
- Fed's Bullard: It's a 'denial of reality' to think inflation will return to old normal
- Trump: We will get massive tax cuts
- Boris Johnson: It's time to get this Brexit thing done
- Draghi reiterates ECB guidance on QE, interest rates
- Fed's Powell: there is a need to be cautious in comparing dot plot to market pricing
- US EIA weekly oil inventories -2747K vs -2400K expected
- ECB Praet: Baseline scenario for future inflation remains contingent on easy money
- Fed's Brainard: In future recessions, could signal that rates at zero-level until inflation above target
- Mnuchin confident that US tax reform "is going to get done"
- US sells 30-year bonds at 2.870% vs 2.875% WI bid
- Gold up $2 to $1293
- WTI crude down 66-cents to $50.64
- S&P 500 down 4 points to 2550
- US 10-year yields down 3 bps to 2.32%
- New Zealand dollar leads, euro lags
Inflation data is the big market mover right now and even though PPI is lower-tier data, it often misses in the same direction as CPI. That was the message Thursday as a few parts of the producer price report were hot and the US dollar climbed around 15 pips across the board.
The enthusiasm didn't last as the dollar slowly sagged from there. USD/JPY slid to a daily low of 112.13 late in the day after hitting a high of 112.52 on the PPI headlines.
The big mover was the headline about the EU offering a two-year transition period to May & Co. That's the first sign of any two-way concessions and cable loved it. Instantly, the pound jumped to 1.3250 from 1.3175. It was a chop higher from there over the next two hours until offers at 1.33 led to a peak at 1.3291 followed by a slow slide to 1.3265.
Oil was extremely choppy as it bounced around an 80-cent range after the inventory data. That kept CAD traders on edge. USD/CAD fell to 1.2450 but was generally bid in North American trade, finishing at 1.2475.
The euro finishes near the lows of the day at 1.1830. Draghi's comments didn't have any impact. Moreso, the drop was about a sag in the US dollar. Overall, the range in US trading was limited to 20 pips.
Make sure to check out my video about the one trading mantra I can't stand