Forex headlines for July 8, 2014:
- US May JOLTS job openings 4635K vs 4350K expected
- June NIESR UK Q2 GDP 0.9% vs 0.7% prior
- US May consumer credit +19.6$B vs +$20.0B expected
- Better jobs picture not leading to consumer spending – Wal-Mart exec
- Moody’s lowers outlook on Canadian banking system
- Fed’s Lacker: Sustained acceleration of growth unlikely
- Lacker sees growth continuing at 2.0-2.5% rate
- Kocherlakota: More likely inflation averages below 2% over next 4 years than higher
- Kocherlakota: US would be fortunate to get 2.5% US growth this year
- Kocherlakota: Americans need to fight against ‘new normal’ of lower long-term growth
- Yellen to appear at Senate committee on July 15
- Gold down $1 to $1318
- WTI crude flat at $103.57
- S&P 500 down 14 points to 1964
- US 10-year yields down 5 bps to 2.56%
- NZD leads, USD lags
If ADP and NFP weren’t going to give the US dollar a lift the the lowly JOLTS report wasn’t going to do the job. In truth, the US dollar was well on its way toward a slump before the JOLTS data and it actually helped to stop the bleeding. Risk aversion was a factor but it’s hard to say it was only a US factor as stocks fell globally ahead of earnings season. It was more of a case of a Treasury rally and traders getting fed up with waiting for a US dollar rally.
USD/JPY was the first out of the blocks as it fell through 101.69 to a session low of 101.48. The bottom firmed up and held in a sign of life from the US bulls but that’s hardly a flashing buy signal as we skidded along the bottom for the remainder of the day. Last at 101.54.
EUR/USD was under pressure in the early going but a slump held at the European low of 1.3588. As US dollar selling accelerated the pair turned higher and then jumped through the overnight high up to 1.3617. Like USD/JPY, the move was capped on the initial break and that was it as the pair chopped to 1.3612 later.
Cable was impressive as it shrugged off the losses from soft manufacturing data. The 50 pip decline to 1.7085 was slowly erased throughout the day and we finish at a US high at 1.7133. Tough to keep cable down.
NZD was a highlight overnight after Fitch upgraded its outlook but it couldn’t build 0.8806, which was the highest since 2011. Another push above 0.8800 fell short but there wasn’t any sign of significant selling as the pair trades at 0.8787.
The Canadian dollar was also resilient despite Moody’s downgrading the country’s banking sector. That barely caused a blip and the loonie hit a session high shortly after. Overall the move on the day was tiny. Last at 1.0679.
One chart to keep an eye on is oil. Crude attempted a rally up to $104.20 but was smashed right back down and hit $103.01. The big figure is a level to watch as oil bounced again up to $103.52. Still, we’re flirting with 8 straight days of declines as Iraq problems failed to dent production.