Forex headlines for September 24, 2014:
- PBOC leader Zhou may be replaced
- French jobseekers fell by 11.1k in August, were expected to rise 16.5K
- August 2014 US new home sales 0.504m vs 0.430m exp
- NATO says sees “significant” Russian troop withdrawal in Ukraine
- Fed’s Mester predicts 3% growth pace in H2 through 2016
- Mester: I generally agreed with Sept 17 FOMC statement
- Fed’s Evans: ‘Very uncomfortable’ with calls to raise rates sooner rather than later
- BOC’s Lane: US policy normalization will act to tighten Canadian policy and financial conditions
- Brent crude hits the lowest since April 2013
- Euro breaks 1.28 in fall to fresh 14-month low
- ECB to spend €300bn on ABS and covered bonds over 2 years – Reuters poll
- Gold down $5 to 1216
- S&P 500 up 15.5 points to 1998
- WTI crude up $1.34 to $92.89
- AUD leads, CHF lags
Sentiment began to turn on the PBOC story. I still don’t think the market appreciates how big of a shift it could be if the PBOC replaces Zhou with someone more dovish. It could be a major catalyst for risk trades, commodities and commodity FX if the replacement is more likely to ease policy.
The US dollar was bid once again in US trading and did some damage against the euro, yen and pound. It took a bite out of the commodity currencies early on but reversed later to finish close to unchanged on the day.
