Forex news for North American trade on August 10, 2018
- US CPI for July MoM 0.2% vs. 0.2% exp. Core 0.2% vs. 0.2% exp.
- Canada July employment +54.1K vs +17.0K expected
- US July monthly budget statement -$76.9 vs -$76.0B expected
- Baker Hughes weekly US oil rig count 869 vs 859 prior
- Guajardo: NAFTA talks are progressing well, will continue next week
- New York Fed GDPNowcast Q3 forecast 2.57% vs 2.58% last week
- PBOC says to deepen market-based interest rate reform
- CFTC Commitments of Traders: Sterling shorts pile in
- Japan economy min: Had productive talks with US on trade
Markets
- Gold down $1 to $1211
- WTI crude up 92-cents to $67.73
- S&P 500 down 20 points to 2833
- US 10-year yields down 5.2 bps to 2.87%
- JPY leads, USD lags
- Turkish lira falls 13.2%
We often use dramatic adjectives like 'drop', 'tumble' and 'sink' to describe forex moves but the fall by as much as 16.9% in the Turkish lira today and 26% since the start of the month stretches the vocabulary. It's an ongoing collapse and a proper reason for panic among domestic investors.
The five-year chart is something to behold (inverted):
The drop in the lira spread to emerging markets with all the notable ones falling around 1% and BRL, ZAR and ARS falling 2% or more.
It translated into broader risk aversion with the yen, Swiss franc and US dollar gaining steadily. Surprisingly, gold and Bitcoin couldn't find buyers.
Economic data was largely overlooked despite some top-shelf releases.
USD/CAD hit the lows of the day at 1.3042 after a strong Canadian jobs headline but the full/part time breakdown was poor and wages numbers were disappointing. It took less than 30 seconds for the market to sort it out and the par rallied right back to 1.3100 then continued higher later on risk aversion and broad USD strength.
EUR/USD was a big mover, falling more than 100 pips is it was punished by technical sellers on the break of support at 1.15 to an 11-month low. The low was 1.1388 and it's finishing about 20 pips above.
Cable had a rough week and the breakdown below the summer lows extended to 1.2775.
The kiwi wrapped up a terrible week at the lows at 0.6577. A brief rise above 0.6600 was sold in the final hours of the day.
Looks like the week ahead will be an interesting one. See you back here Monday.
