Forex news for December 11, 2014:
- November 2014 US retail sales 0.7% vs 0.4% exp m/m
- Retail sales control group 0.6% vs 0.4% exp m/m. Prior 0.5%
- US initial claims 294K vs 297K estimate
- Canadian Q3 capacity utilization rate 83.4% vs 83.0% expected
- Canadian Oct new housing price index +0.1% vs +0.1% m/m exp
- US Nov import price index -2.3% y/y vs -2.6% y/y expected
- US Oct business inventories +0.2% vs +0.2% expected
- RBA’s Stevens says AUD should be closer to 0.7500
- Abe seen winning more than 300 Lower House seats — Nikkei
- Return to sustainable global economic growth requires continued financial innovation says Poloz
- Greek PM Samaras says the people do not want early elections
- Weaker euro and oil price should boost economy says German econ ministry
- FX trading volumes wane from Sept but still up from last year
- US Q3 change in household net worth -$141B
- US sells 30-year bonds at 2.848% vs 2.875% WI
- Gold down $2 to $1224
- WTI crude down $1.18 to $59.75
- US 10-year yields up 2 bps to 2.18%
- S&P 500 up 9 points to 2035
- USD leads, JPY lags
The US dollar had some mild momentum heading into New York trading after the soft takeup in the latest ECB TLTRO but it was a solid retail sales report that really built the momentum.
It wasn’t a spectacular report but — time and time again — we’ve seen that any good news reminds traders that the US dollar is the best place to be and the momentum continued until the last hour of the day when stocks gave up most of their gains.
EUR/USD bounced to 40 pips after the TLTRO news to 1.2466 but sagged as US traders saw the headlines and not long after retail sales, the European lows cracked and then it was a steady slide all the way to 1.2372. That was followed by a 30 pip bounce but a new marginal low came later, before yet another bounce. Last at 1.2399.
USD/JPY put in one of its best days of the year (there have been lots of good ones lately) as it rose 110 pips to 119.00. It was looking like a very strong day when prices crested at 119.56 but a good portion of those gains evaporated.
Sterling has completely kept pace with the US dollar and done some damage on the crosses. Cable is flirting with the European high at 1.5721. Part of the GBP strength is flowing through EUR/GBP.
The Canadian dollar hit a five year low as USD/CAD finally busted 1.1500 with authority. The high was 1.1550 but, interestingly, it couldn’t make a fresh high after oil broke below $60 later in the day. Still, with oil prices in a breakdown, it’s only a matter of time.
The Australian dollar proved that when something can’t rally on good news, it’s the strongest sell signal. It bumped higher on employment but gave back the gains in a few hours and tumbled in European trading. A spike low down to 0.8215 hit on the headlines from Stevens but jawboning is old news and it quickly bounced back. Last at 0.8266.
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