Forex news for Nov 28, 2014:
- Q3 2014 Canadian GDP 2.8% vs 2.1% exp q/q ann
- Prior Canadian GDP 3.1%. Revised to 3.6%
- October 2014 Canadian PPI -0.5% vs -0.4% exp m/m
- India loosens gold import rules
- UK’s Cameron lays out his immigration plans and asks the EU to back him
- Italy stats office sees Q4 GDP flat
- Gold down $23 to $1167
- WTI crude down $7.54 to $66.15
- Brent falls below $70 per barrel for first time since May 2010
- US 10-year yields down 8 bps to 2.16%
- S&P 500 down 5 points to 2066, up 2.5% in November
- USD leads, JPY lags
Oil crashed, but you probably know that already. There were some tentative signs of a bottom at $67.75 coming into US trading. We went back and retested in Europe and it held for a bounce to $69.70 but a fresh wave of selling smashed it down to $66.15 and it closed virtually on its knees.
You have to feel sorry for Canadian dollar bulls this month. There has been one good Canadian data point after another but the loonie is trading like a proxy for oil and was absolutely battered on Thursday and Friday. The GDP numbers momentarily sent it 40 pips lower but the move was erased almost immediately. In the bigger picture, a steady climb started in Europe at 1.1350 and rose as high as 1.1444. It finished near the top.
Another one to keep an eye on is the ruble, after USD/RUB hit 50 on Friday.
The main theme was US dollar strength. With the US out for holiday it might be underscoring that much of the demand for dollar is coming from outside the country. There was a huge bid in Treasuries and it will take months to see the TIC data but the buyers are likely offshore.
There was talk of EUR/GBP buying and that mean weakness the pound right across the board. Cable is down in danger of breaking the Nov lows at 1.5632.
Have a great weekend.
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