Forex news for July 21, 2015:
- US industrial production rose less than expected in benchmark revisions
- US industrial sector is 2.6% smaller than the Fed thought
- BOE's Carney says decision on when to hike will come into sharper focus at the turn of the year
- Hungary announces end of rate cutting cycle after 5th cut this year
- BOJ's Kuroda says he expects to meet the inflation target in FY2015/16
- Kuroda: Would not hesitate to ease if needed
- Greece upgraded to CCC+ from CCC- by S&P
- Gold down $9 to $1099
- WTI crude up 21-cents to $50.36
- S&P 500 down 9 points to 2119
- EUR leads, GBP and USD lag
A month of non-stop US dollar gains left the dollar trade overcrowded. It thinned out Tuesday on a quiet news day as Treasury yields declined and Eurozone yields climbed. The industrial production revisions may have added to the momentum.
The USD retracement started as a trickle in EUR/USD buying then turned into a flood of USD/JPY selling and commodity currency buying.
EUR/USD rose 150 pips from the European lows, rising just above the highs from last Wednesday when Greece passed its austerity bill. It also crested slightly above the 38.2% retracement of the decline in the past two weeks. Last at 1.0940.
USD/JPY started at 124.30 but hit stops below 124.25 and then it was a quick ride to 123.75 where it finally found support. There was a small, late bounce to 123.94.
The pound and the US dollar are clearly the strongest currencies in the FX market at the moment. They've been tending to move together and that was the case today as the both fell in broad terms but cable traded in a 1.5530 to 1.5575 range, chopping back and forth.
The Australian dollar led commodity FX despite some less-intense jawboning from the RBA and a dovish tilt. The gains were mostly in US trading in a run up to 0.7450 at the highs from 0.7370.
All the commodity currencies gained about 50 pips on the day against the US dollar. USD/CAD fell to 1.2917 but there were buyers, especially as oil gains faded. Last at 1.2946.
