Forex headlines for July 9, 2014:
- FOMC Minutes: Sees QE ending in October if current outlook holds
- Many participants want to end portfolio reinvestments after first rate rise
- Some Fed officials saw investors too complacent on risks
- ECB’s Draghi: Governing council determined to keep monetary policy accommodative for extended period
- New BOE deputy governor Dr Nemat Shafik sees substantial risks in both directions
- Hilsenrath says time is right for Fed to acknowledge better jobs picture
- Keystone XL decision will be postponed beyond mid-term elections
- US sells 10-year notes at 2.597% vs 2.590% WI
- NZD/USD at highest since 2011
- Gold up $10 to $1328
- WTI crude down $1.13 to $102.27
- S&P 500 up 8 points to 1972
- NZD leads, JPY lags
The US dollar bulls were begging for a hawkish headline to appear in the FOMC minutes. They tried to make believe with the lines on ending reinvestment or finishing the taper in October but there was nothing that wasn’t expected and there was no talk of rate hikes. Still, the dollar bulls mounted a charge and USD/JPY jumped a dozen pips to 101.86 but it was short lived as it later crashed down to 101.55.
It was a similar story across the board. The US dollar climbed in the lead-up to the Minutes on hopes for hawks but after a brief fall in EUR/USD down to 1.3612 it reversed and the pair eventually hit a session high at 1.3649.
Once again cable proved impossible to keep down as it also reversed up to 1.7160 from 1.7110. The sticky 1.7140/45 are of resistance offered some tough spots for sellers but cable overcomes all.
Similar story for NZD/USD, which has been the most-unstoppable force in FX. The risk aversion earlier this week did almost nothing to stop it and the 2011 high of 0.8862 looms ever larger. We close about 40 pips away.
Oil fell for the ninth consecutive session and was down whether the US dollar was up or down. It was a steady slide but we’re getting closer to the June low of $101.60 so some profit taking on shorts could kick in soon.
