Forex headlines for July 29, 2014:
- July 2014 US consumer confidence 90.9 vs 85.3 exp
- US adds more Russian banks to the sanctions list
- Spanish Q2 growth to match Bank of Spain 0.4% forecast says de Guindos
- Terror attack reported in Xinjiang, ‘dozens’ of casualties – Xinhua
- SNB’s Danthine says can’t tolerate franc appreciation
- July US Texas service sector outlook index 22.4 vs 21.1 prior
- S&P 500 down 8 points to 1970
- Gold down $3 to $1300
- WTI crude down 80-cents to $100.84
- USD leads, NZD lags
The euro fell to a fresh low since November as fear and flight to US dollar safety were the dominant themes. Stocks wavered between gains and losses but ultimately the downside won out and shares closed at the lows of the day.
The overwhelming trend was US dollar buying. The moves were slow at first but accelerated, especially in the commodity currencies. USD/CAD rose to 1.0860 from 1.0820 in the session in a quick move after the 200-dma broke.
EUR/USD is being held up by bids at 1.3400 but came close to breaking it and remains near the lows.
Cable fell as low as 1.6934 and was the first currency to break down. The euro eventually played catch up and the pound stabilized.
For a ‘risk off’ day it was a surprise to see the persistent (albeit modest) strength in USD/JPY. It gained at dozen pips to 102.11 despite falling Treasury yields.
The two drivers were speculation about a hawkish comment from the Fed tomorrow and the looming feeling that Ukraine will get worse before it gets better.
