Forex headlines for December 4, 2013:
- ISM non-manufacturing PMI 53.9 vs 55.0 exp
- ADP employment report 215k vs 173k exp
- Beige Book: Fed saw ‘modest to moderate’ growth with stronger manufacturing
- Beige Book: Hiring increased modestly or was unchanged across districts from early Oct through mid-Nov
- October US new home sales 444k vs 425k exp
- November US Markit services PMI final 55.9 vs 57.1 prior
- Business Roundtable CEO outlook index rises to 84.5 from 79.1
- Bank of Canada decision: Downside risks to inflation seem greater than before
- Draghi likely to announce ECB minutes tomorrow – Barclays
- US 10 -year yields hit highest since Sept 18
- Gold up $20 to $1243
- WTI crude up $1.10 to $97.14
- S&P 500 down 0.1% to 1792 after trading in wide range
- JPY leads, AUD lags
Trading today felt like swimming in the current of three rivers. Economic data was swashing in different directions and unexplained flows were washing over.
EUR/USD finishes the day virtually unchanged at 1.3590 but it was volatile in US trading. The pair dumped down to 1.3528 not long after US trading got underway. The ADP data hurt the pair on taper hopes but bids ahead of yesterday’s low caught to move and it eventually climbed all the way back, partly on questions about what could happen with the ECB tomorrow.
The divergence in economic data pulled the market in different directions. Stocks fell hard at one point, dragging USD/JPY below 102.00 but strong bids at 101.80 and a turnaround in stocks led to a bounce to 102.25.
USD/CAD wasn’t expecting inflation worries from the BOC and took out 1.07 afterwards. The close today, near 1.0680, will be the highest in 3 years.
AUD/USD remains in the deep doldrums, slipping to 0.8999 but failing to knock out stops lower, at least so far. Last at 0.9034.