Forex news for NY trading on January 14, 2020
- PPI, Empire Fed and the Beige Book are on the US economic calendar Wednesday
- US crude oil settles at $58.23
- McConnell says Trump impeachment trial could begin next Tuesday
- Bitcoin trades to highest level since November 12
- US won't remove China tariffs in phase one deal until after election
- Fed's George: Appropriate to hold rates for now to assess economy
- US Senate will attempt to pas USMCA this week
- More oil news: EIA raises US crude oil output to 13.30 million BPD (plus 1.06M)
- Reports that OPEC+ may postpone March meeting to June
- European shares end the session mixed
- House will vote to send impeachment to Senate tomorrow but there's a caveat
- Unanswered phase one deal question is what imports China commits to (and the caveats)
- SNB responds to its inclusion on US FX manipulation watchlist
- US December CPI +2.3% vs +2.4% y/y expected
In other markets near the close:
- Spot gold is trading down $1.20 what -0.08% at $1546.66. The precious metal did rebound off of the low price of $1536 to a high of $1548.93.
- WTI crude oil futures are trading up $0.34 or 0.59% at $58.42. The high price extended to $58.72, while the low price fell to $57.72
- Bitcoin on Coinbase rallied a healthy $557 to $8688. The high price extended to $8859.17
In the US stock market, the S&P index and NASDAQ index are closing lower. The Dow industrial average is closing the day out with a modest gain.. The major indices are ending the session closer to their lows for the day. In the European markets German DAX, France CAC and UK FTSE all closed near unchanged levels. The Portugal PSI 20 was the biggest gainer at 0.61%, while the Spain's Ibex was the biggest loser at -0.16%.
In the US debt market today yields moved to the downside with a flatter yield curve. The 2 year yield fell by -1.4 basis points, while the 10 year decline by -3.5 basis points. That flattened the yield curve by over 2 basis points for the 2 – 10 year yield spread.
In the forex market today there was a lot of ups and downs.
Overall, the Swiss franc was the strongest of the major currencies. The US treasury put Switzerland on the watchlist for being a currency manipulator. The idea is that the Swiss National Bank sells CHF as an offset to safe haven flows from say US trade war, or impeachment,or other geopolitical risks. Sounds like the US is starting to focus on that country for potential trade issues. The weakest currency today was the NZD.
PS the US treasury did move China to the watchlist from being a currency manipulator before the planned signing of the Phase 1 trade deal on Wednesday. The USDCNH (offshore yuan), has been falling into the signing of the trade deal (stronger CNH). Looking at the daily chart, however, the price tested a swing area and trendline at the low price today before rebounding and closing near the day's high. The swing area support comes in at 6.86079 to 6.8708 (closing at 6.8900). A move below the 6.86079. A move below would solicit more selling for the pair. Be aware
Technicals for other major currencies:
- The EURUSD started the New York session below its 100 hour moving average at 1.11182, but after rebounding back above the MA level, the pair moved up to test its 200 day moving average at 1.1137. The falling 200 hour moving averages currently at 1.11409 (and moving lower). The pair trades between those moving average levels at 1.1124 near the end of the NY session. The waters are muddy as traders figure out which way the next break will occur
- The GBPUSD climbed in the New York session toward the falling 100 hour moving average at 1.30383. The high price reached 1.3033. If the price is to continue higher, getting above that moving average level is step 1. Until then, sellers still have a little more short-term control.
- The USDJPY traded up and down for most of the trading day, but it did dip to new session low on an afternoon headline saying the "US won't remove China tariffs in phase one deal until after election". The low price on the move at 109.846 tested a lower trendline at 109.82 and bounced. In the new day, it will take a break below that trend line (it is rising), and then the swing highs from December at 109.675 to 109.723, to solicit a more bearish bias for the pair. The pair is closing the day at 109.99.
In other news, Mitch McConnell said that the impeachment trial Pres. Trump will likely begin next Tuesday. That is contingent on House Majority Leader Nancy Pelosi sending the 2 articles of impeachment to the Senate.
US CPI came in touch weaker than expectations at the 2.3% versus 2.4% estimate.
Finally Fed's Esther George (a hawk) said that it's appropriate that the Fed keep rates steady and assess the impact on the economy.
Good fortune to trading.
