Forex news for US trading, May 18, 2015:
- May 2015 US NAHB housing market index data 54 vs 57 exp
- JPMorgan raises Q2 euro forecast
- EU to propose compromise on Greek deal
- We're in the final stages of bailout negotiations says Tsipras
- Greek finmin Varoufakis: Greece is 'very close' to deal with creditors
- ECB QE count: PSP 122.4bn vs 108.7bn last week
- Shares of forex broker Plus500 crash on account freeze
- The market is coming close to mentioning the "R" word on the US economy
- S&P 500 up 6 points to record 2129
- Gold up $1 to $1225
- WTI crude down 8-cents to $59.61
- US 10-year yields up 9 bps to 2.23%
- German 10-year yields up 2.5 bps to 0.65%
- USD leads, CAD lags
Canada was on holiday Monday and the loonie bears used it to crush the loonie. USD/CAD rose the most in two months to 1.2170 from 1.2050 at the start of US trading. I'm always suspicious of a move on a holiday, especially in CAD and even more so with oil flat on the day.
In general, the US dollar was solid right across the board. There wasn't a catalyst in the news but bonds were slumping and Treasuries underperformed bunds and other sovereigns, enhancing the US yield advantage. Some money might have flowed into US stocks as well.
EUR/USD was under constant pressure. US traders arrived to 1.1400 and after a break of the European low of 1.1366 it was a quick slide toward Friday's low of 1.1325. It bounced 30 pips from there and then fell back down to 1.1298. Talk of stops below the big figure never materialized.
USD/JPY gained about 30 pips, which isn't all that impressive give USD gains elsewhere and rising yields. A break above Friday's high of 119.92 and 120.00 didn't inspire and fresh buying. The pair has turned a bit lackluster lately but sometimes that's the precursor to a move.
GBP/USD was soft early in UK trading but stabilized and traded around 1.5675 for most of the day then finished near the lows at 1.5650. The market is cautious ahead of tomorrow's UK CPI report (check out Ryan's preview).
The Australian dollar was also a bit more quiet ahead of the RBA minutes at 2330 GMT. But the kiwi wasn't fresh housing measures are stoking speculation about an RBNZ rate cut and it was steady selling down to 0.7370. There is a very minor double bottom there on the intraday chart but it's all very precarious.
