Forex news for US trading May 19, 2015:

  • April 2015 US housing starts 1.135m vs 1.060m exp
  • Traders pissed off after discovering Coeure ECB speech delivered in private
  • BOC's Poloz: "I must underscore how uncertain the outlook is"
  • Q&A Poloz: Equilibrium growth rate may have slowed to 1.8%
  • New Zealand dairy price index -2.2%
  • SNB's Danthine says they can expand the balance sheet if benefits prevail
  • ECB's Praet says the market reaction to QE was stronger than expected
  • Danger of deflation is gone says ECB's Nowotny
  • Nowotny: Very low and negative rates not permanent
  • SNB's Danthine: Sees 'probably one bad negative quarter'
  • Former Fed Governor says Yellen Fed would be 'laughed out of the classroom'
  • Wal-Mart misses estimates
  • Gold down $17 to $1208
  • WTI crude down $2.17 to $57.26
  • US 10-year yields up 5 bps to 2.28%
  • S&P 500 down 1 points to 2127
  • USD leads, EUR lags

Housing starts haven't been so important since the crisis. The market was begging for some good US economic news and decided that a strong housing starts reading was good enough.

USD/JPY jumped to 120.40 from 120.15 on the first move and then continued to climb after some consolidation, hitting 120.74 and finishing near the highs.

EUR/USD was a mess. It fell when some hedge fund managers got the Coeure speech in late in US trading yesterday and then tumbled another cent when the headlines hit. Traders aren't happy and I hope Draghi is grilled at the next ECB press conference. EUR/USD continued to fall to 1.1119 but bids ahead of the figure held.

GBP/USD was at lows at 1.5500 when the US arrived and they were quick to sell another 50 pips on the housing data but it found bids there and was sideways around 1.5515 for the remainder of the day.

Poloz turned out to be a non-factor. He was perhaps a tad less optimistic but mostly emphasized uncertainty while quashing talk about changing the inflation target, at least for now. Oil weakness and general US strength pushed it up to 1.2250 but CAD was the second-best performer, showing that some of the squeeze on Monday was overdone.

AUD/USD dropped through 0.7956, breaking the Asian low and then hitting stops on housing starts down to 0.7926. Some consolidation around 0.7935 followed then a second wave of selling down to 0.7910. Bids at the figure held.