Forex headlines from US trading for December 1, 2014:
- November 2014 US ISM manufacturing PMI 58.7 vs 57.8 exp
- November 2014 US Markit manufacturing PMI final 54.8 vs 55.0 exp
- November 2014 Canadian RBC manufacturing PMI 55.3 vs 55.3 prior
- The ECB only managed to buy 368 million euros in asset-backed securities in the first week
- Fed hike timing and pace could be slowed by inflation outlook – MNI
- Fed’s Fischer says significant chance that wage inflation is about to pick up
- Fed’s Dudley says pace of tightening to depend on financial market response
- Dudley sees good reasons to believe business investment will rise
- Fed’s Kocherlakota says Fed inflation goal should be symmetric
- Fed launched secret inquiry after Medley report predicting FOMC action
- SNB may back ECB efforts against deflation, ATS reports
- Hackers steal M&A info – FireEye
- Gold up $45 to $1213 from as low as $1142
- WTI crude up $3.21 to $69.35
- US 10-year yields up 5.6 bps to 2.22%
- S&P 500 down 14 points to 2053
- CAD leads, USD and AUD lag
The huge turnarounds in gold and oil were the main news on the day. Gold was already on the upswing as US traders arrived but once it covered Friday’s losses it started a squeeze through $1200 and as high as $1221. From bottom to top it was a nearly 7% move. In silver, prices reversed 17% — the biggest intraday reversal on record.
The move in gold may have overshadowed an equally impressive turnaround in oil. Crude prices hit a multi-year low of $63.72 in European trade but were a moonshot in the US, climbing to $69.34 in a one-way move.
The Canadian dollar was the big mover in US trading as it piggybacked on oil, knocking USD/CAD down to 1.1323 from 1.1380. There is some talk about a hawkish shift from the BOC despite the slide in oil prices.
The general theme was US dollar weakness but the extremes came just before the ISM data. Solid numbers reversed USD selling and boosted USD/JPY to 118.35 from 117.87.
EUR/USD twice perked up over 1.25 but was knocked back both times. Last at 1.2473.
The Australian dollar is in focus in the hours ahead. It wasn’t able to take part in the bulk of US dollar selling with most traders fearing a more-dovish RBA.
