Forex headlines for April 30, 2014:

  • US Q1 advance GDP 0.1% vs 1.2% expected (q/q annualized)
  • April ADP US employment 220K vs 210K expected
  • Chicago April PMI 63.0 vs 57.0 expected
  • FOMC statement: Economy picked up, consumer demand rising ‘more quickly’
  • Full text of the April 30 FOMC statement
  • Canadian Q1 GDP Feb m/m +0.2% vs +0.2% exp
  • Bank of Canada appoints Lynn Patterson as deputy governor
  • ECB’s Coeure says central banks should be ready for co-ordination if need be
  • DOE US crude oil inventories +1.70m vs +2.73m expected
  • The Fed held an unusual meeting yesterday
  • BOE’s Haldane says household debt remains a worry
  • Haldane: Some dissent about how useful forward guidance is
  • US close to criminal charges against big banks
  • Gold down $4 to $1291
  • WTI crude down $1.46 to $99.82
  • S&P 500 up 5 points to 1883
  • US 10-year yields down 4 basis points to 2.65%
  • NZD leads, CAD lags

The GDP report stole the show. It was more of a horror show and the US economy ground to a halt in Q1. Blame the weather all you want but exports and business investment were the drivers — not exactly the kind of thing that shuts down in a snowstorm. Consumer spending was surprisingly strong but it was driven by healthcare.

The US dollar sank and then sank further after the GDP numbers. USD/JPY fell 25 pips to 102.30 on the initial push and after some consolidation skidded to 102.03. Predictably there was interest ahead of the big figure before the FOMC and the lows held. The last-minute trade was worry and when the FOMC pretended that the economy wasn’t weak in Q1, it gave USD/JPY a slight lift to 102.24.

The larger story for the euro was eurozone CPI. The market had lowered expectations after yesterday’s German print so even though there were some signs of weakness, the euro bounced back on a relief rally. Core prices also moved up and then US GDP hit and that erased the last of the German CPI losses, rising to 1.3775 at the highs. Even when the other US economic indicators showed some strength, the euro hardly sank.

What can you say about cable? All news is good news for the pound and Andy Haldane even talked about the unease at pledging to keep rates low. The pair touched a multi-year high after GDP and caught a second bid at the London fix — hitting 1.6900.

We’re not sure where the kiwi bid materialized from but risk trades had an okay day. It was an impressive day for NZD/USD as it scaled up to 0.8633 from 0.8555 at the start of US trading.

The loonie was beaten up alongside the US dollar. It’s no surprise as Canada depends on a strong southern neighbor.