ForexLive Americas FX news wrap: Euro falls on Draghi
Forex news for US trading on Sept 3, 2015:
- ECB Governing Council increases issue share limit
- ECB leaves interest rates unchanged
- Draghi Q&A: There wasn't any discussion about increasing QE
- Draghi Q&A: We may see negative inflation numbers in the coming months but gov council tends to think it's transitory
- Draghi: Too soon to conclude inflation outlook deteriorating
- ECB lowers growth and inflation forecasts
- Full text of ECB President Mario Draghi's opening statement
It was Draghi's 68th birthday today
- ISM non-manufacturing index 59.0 vs 58.2 expected
- US July trade deficit $41.86 billion vs $42.20 billion expected
- Final Markit services PMI 56.1 vs 55.0 expected
- US initial jobless claims 282K vs 275K estimate
- August 2015 US Challenger layoffs 41.2k vs 105.7k prior
- Canada international merchandise trade -0.59B vs. -1.20B estimate
- US to sanction Chinese companies stealing intellectual property
- IMF says Fed can afford to wait before raising rates
- Gold down $9 to $1125
- US 10-year yields down 1.7 bps to 2.16%
- WTI crude up 51-cents to $46.76
- S&P 500 up 2.2 points to 1951
- NZD leads, EUR lags
The pound finished lower for eighth straight session to match the longest losing streak since 2008. It fell as low as 1.5218 but crawled off the floor ahead of June low and rebounded to 1.5269 before a late slip to 1.5252.
The big move on the day was in the euro after Draghi said the ECB changed its rules to allow for buying a larger part of an individual bond issue. The market took it as a sign the ECB's prepared to do more. Draghi was also downcast on emerging markets and cut ECB forecasts. The euro first fell to 1.1110, bounced 40 pips and then slowly skidded to 1.1087. After Europe shut down it retraced slightly to 1.1121 but remained far from the 1.1230 pre-ECB level.
USD/JPY started at 120.30 but was sucked lower in EUR/JPY selling on the ECB and fell to 119.64. That was a buying opportunity as better risk sentiment prompted a complete retracement. Since then there has been a bit of a back-and-fill as the range tightened around 120.08.
USD/CAD finally caught a bid. One factor was a better Canadian trade report including a surge in exports. There were some curious quirks in the data but the pair fell all the way to 1.3135 then bounced to 1.3210 on the ebb and flow in oil.
The kiwi caught a big bid as it broke the 100-hour MA in a rally to 0.6410 from 0.6350. Aside from better market sentiment there wasn't a whole lot to explain the buying. Last at 0.6395.
And, an added bonus from Greg: Infograph: Non-Farm Payroll preview