Forex headlines for September 4, 2013:
- Senate panel authorizes limited US military strike in Syria
- Beige Book: US grew at a ‘modest to moderate’ pace in most districts
- BOC leaves rates, frets about investment
- US car sales beat estimates
- July US international trade balance -$39.15bn vs -$38.7bn exp
- July Canadian trade balance -C$0.93bn vs -C$0.35bn exp
- Fed’s Williams says he’s going to Sept meeting with ‘open mind’ on taper
- Russians say lab results show Syrian chemical weapon similar to ones made by rebel group
- S&P 500 up 0.8% to 1653
- WTI crude down $1.28 to $107.26
- AUD and NZD lead, JPY lags
- Gold down $18 to $1394
A US morning EUR/USD took a straight line to 1.3218 from 1.3170 but hit a wall. The rebound started yesterday as the 200-day moving average lent support. After the burst of activity, a tight range from 1.3205 to 1.3218 has contained the action. Look to ‘go with’ a break in either direction, at least for a few pips.
USD/JPY is on the backslide at the end of US trading. The vote for Syrian action led to a quick 20 pip drop to 99.60 and yet another failed attempt at 100 (that’s three over the past two days if you’re keeping score). The good news for the bulls is that rejections have been half-hearted. If USD/JPY can stay above 99.30, a break is only a matter of time.
Some focus was on the Canadian dollar because of the BOC decision. Expectations for any meaningul change were zero and that’s exactly what Poloz delivered. The kneejerk in USD/CAD was 20 pips lower despite some dovish leanings from the BOC. The reaction probably had more to do with CAD traders jumping on the risk train along with their Aussie and Kiwi pals.
It was a rare day of 100+ pip gains for the Aussie. AUD/USD was a steady climber as it continues to ride the post-RBA wave. Most of the move was in Europe but the momentum continued to 0.9187 before settling back to 0.9170.
