Forex news for November 20, 2014:
- Philly Fed Nov 40.8 vs 18.5 exp
- US Oct CPI 1.7% vs 1.6% y/y expected
- US initial jobless claims 291k vs 285k exp
- September 2014 Canadian wholesale trade sales 1.8% vs 0.8% exp m/m
- US Oct existing home sales 5.26m vs 5.15m exp
- SNB’s Zurbrugg will enforce cap with utmost determination
- South Africa leaves benchmark rate unchanged at 5.75%
- Draghi and the ECB stand ready to protect the euro
- November 2014 US Markit manufacturing PMI flash 54.7 vs 56.4 exp
- 4.2% more Americans will travel this Thanksgiving – AAA
- US Oct leading index +0.9% vs +0.6% exp
- Eurozone consumer confidence -11.6 vs -10.7 exp
- Mester: Fed should consider developing consensus forecasts
- Goldman Sachs sees small stock market gain in 2015
- Survey of primary dealers shows first Fed hike in June 2015
- Soros and Gross combine
- ECB’s Praet says we’d see total agreement on governing council under deflation
- ECB’s Mersch says monetary policy alone can’t create growth
- UBS strategists say EURCHF price action suggests SNB may have been buying
- Risk remain in markets despite steps to regulate liquidity says Fed’s Tarullo
- Gold up $12 to $1195
- WTI crude up $1.00 to $75.58
- US 10-year yields down 2.7 bps to 2.33%
- CAD leads, EUR lags
Traders did a double-take on the huge jump in the Philly Fed and many still don’t believe the huge number. The big story on the day was the inability of the US dollar to rally on good inflation, home sales and the Philly Fed.
The dollar has been hit by profit taking in the past two Fridays and it might have started early. Then again, dollar bulls shouldn’t be discouraged by a single day stall after two months of non-stop gains.
The dollar struggled but little damage was done
Early in Europe, USD/JPY touched 118.98 in a surge of buying but it couldn’t crack the big figure and it began to slid, hitting 118.00 early in US trading. A momentary rally to 118.40 followed CPI but it reversed down to 117.74 — the low of the day. Another rally followed the Philly Fed with the pair hitting 118.30 but again it slid back. The second time it held the low and was on the upswing at the end of the day at 118.12.
On the daily chart, USD/JPY and EUR/JPY (even moreso) are flashing warning signs and potential falling star formations.
EUR/USD was a whippy one, spazing around the 1.2500 to 1.2570 range all day. It’s a bit of a wedge to end the day so a break might be setting up for a good trade. We’ve been hearing lots of talk about cutting shorts (and even some brave longs).
Sterling was strong on upbeat retail sales numbers but after hitting the highs of the week at 1.5737 and hitting some buy stops along the way, it fell back to 1.5697. It was still the first time cable made back-to-back gains since October.
USD/CAD was on the defensive as oil rallied and a good Canadian wholesale sales report sent the pair to 1.1300 from 1.1360.
The Australian dollar bounced to 0.8622 from 0.8566.
