Forex trading headlines from the Americas session 12 July
- Spain’s deputy economic minister says Italy ratings cut not good news
- Germany seeks euro area consensus on Portugal
- JPM Q2 report up beat on US economy
- JPM’s Dimon sees US economy gaining strength but sees another year before normality returns
- JPM’s Dimon sees US unemployment at 6.5% next year and knocks back Fed chair
- Portuguese opposition party pushes for bailout re-negotiation
- Portuguese president says party negotiations should be over soon
- US June PPI come in over expectations due to higher energy costs 0.8% vs 0.5% exp m/m. 2.5% vs 2.1% exp y/y
- US senator Warren pushes for reviving Glass-Steagall act
- Merkel says euro area on right path and wouldn’t mind shopping in Slovenia
- US July Michigan consumer sentiment index 83.9 from 85.0 exp
- US weekly ECRI economic index 130.3 vs 130.4 prior
- CFTC votes 3-1 to approve cross border swap guidance but is warned by industry groups
- Fed’s Plosser says Fed should halt QE by end of 2013. Unfortunately the hawk has no talons
- Fed’s Bullard trumps non-voting Plosser and calls for full power to QE
- UPS paints a grim economical picture ahead of official Q2 earnings release
- Cyprus president says it’s cool for government to hit savers while sitting on a pile of gold
- France loses triple A rating, downgraded to AA+ by Fitch
- Fed’s Plosser forecasts 6.5% unemployment rate by end of 2014
- Bullard says higher rates may reflect greater optimism
- Plosser says Fed should defend 2% price goal while Bullard sees no signs of asset bubbles
- CFTC shorts double to 9 July and get creamed
Currencies were generally following a risk on/off theme during the day.
EUR/USD weakness carried over from the European session, with Portuguese worries playing a part. We slid on news of Portugal’s opposition leader calling for a re-negotiation of the bailout and hit 1.3000 on a combination of French downgrade rumours and a UPS earnings warning. We then picked back up on a general risk on theme with the comments from Bullard trumping comments from Plosser. The French downgrade was confirmed late in the day and the market had it priced in and we fell 60 pips from the Bullard high at 1.3090 to 1.3030 but soon reversed. We close out the week just over 300 pips from the low from a 450 odd pip weekly range.
GBP/USD continued it’s fall from yesterdays 1.5200 perch getting as low as 1.5077 in other wise quiet trading. The pair is looking to close out the week above 1.51 which could signal further gains to come.
USD/JPY followed the risk on theme and was underpinned by good JPM earnings and a fairly upbeat economic report. We topped out into orders at 99.70 but took a knock on the UPS news. A brief look below 99.00 was swiftly turned around and we managed to post above 99.50 before settling the afternoon between 99.30/45
AUD/USD finally decided to pick a fight with the 0.9000 level but came out second best. We managed a tick below to knock out the options but was back trading up in the 0.9030’s within moments. We managed to get back up to the 0.9070’s and close the week around the 0.9060 level.
EUR/AUD was the main driver in the aussie fall as it tested August 2010 highs early on at 1.4442. Another run later in the day broke the high to touch 1.4478 but stalled ahead of the next historical high of 1.4482.
Right, that’s me done. What a week eh?
Don’t forget Chines GDP, IP and retail data is up early Monday morning at 2am gmt.
Thank you once again for taking part this week and I hope you all have a very good week end.