Forex news for North American trading on August 3, 2017:
- Mueller is setting up grand jury for Russia probe
- June US factory orders +3.0% vs +3.0% m/m expected
- ISM (July) non-manufacturing composite index 53.9 vs. 56.9 estimate
- Markit July final US services PMI 54.7 vs 54.2 expected
- Initial jobless claims 240K vs 243K expected
- US Challenger job cuts July 28.3k vs 31.1k prev
- BOE quarterly inflation report
- BOE MPC leave rates and QE on hold, vote remains at 6-2
Markets:
- S&P 500 down 5 points to 2472
- Gold up $2 to $1268
- WTI crude down 65-cents to $48.94
- US 10-year yields down 5 bps to 2.22%
- JPY leads, GBP lags
The big event in European trading was the Bank of England decision. The market reacted to the voting and the declines in the forecasts. Carney also blamed high inflation on the pound, which is essentially saying it's transitory. He tried to balance that by saying more hikes were coming than markets anticipated but that had no effect. Cable dropped to 1.3160 from 1.3240 on the headlines and continued to 1.3211. It recovered 30 pips on the soft US ISM non-manufacturing data and chopped from there.
USD/JPY legged lower on two separate events. The ISM data sent it to 110.00 from 110.40 but bids ahead of this week's low of 109.91 held the line just above. The second leg came on the Mueller headlines but the new low was only about 10 pips below, but still a seven-week low and a bad sign. Last at 110.02.
EUR/USD started at 1.1840 and finished at 1.1870, flirting with 1.1890 a couple times but backing off. It was generally a bystander to the USD and GBP drama but retained that perky personality despite the pop-and-drop yesterday.
USD/CAD climbed above 1.26 for the first time since July 20 then promptly fell back to 1.2551 but the bears aren't what they used to be, in part because of another 5% fall in Toronto house prices.
AUD/USD quietly put together a nice uptrend on a series of higher lows after hitting 0.7914 in Asia. That was mostly due to the dollar's stumbles but it made for a decent finish to the day at 0.7948.
It's US and Canadian jobs day on Friday, so expect plenty of drama ahead.
