Forex news for North American trade on May 14, 2019:
- Pres. Trump: Relationship with Xi is extraordinary, tension just 'a little squabble'
- Mnuchin may visit China 'soon' and wants to continue talks - spokesman
- Corbyn expects May to offer customs agreement that's basically a union - report
- Fed's George: Wait-and-see is appropriate response on rates
- OPEC says supply fell slightly in April
- Trump says China will probably reduce interest rates, says Fed should do the same
- Canada Teranet house price index +1.2% y/y vs +1.5% prior
- US April import price index ex-petroleum -0.6% vs +0.2% m/m expected
Markets:
- NZD leads, GBP lags
- S&P 500 up 22 points to 2834
- Gold down $3 to $1296
- US 10-year yields up 1.2 bps to 2.85%
- WTI crude up 32-cents to $61.35
Trump gave a lift to risk assets by downplaying the China trade war and talk of Mnuchin heading to China underscored it. However stocks finished well off the highs and so did risk-FX like the New Zealand dollar.
USD/JPY wasn't particularly motivated today. It followed the shape of the risk trade but the range was small. It started US Trading near a session high at 109.75 then sagged to 109.45 before finishing at 109.63.
The bigger moves were in European currencies as both the euro and pound came under pressure and finished at session lows. The euro move was relatively small as it fell 20 pips but cable lost a half-cent. The cross-party talks appear to be going nowhere even with more scheduled in the future. The thinking is that both sides are only agreeing to continued talks in order to appear to be engaging while neither have the will or the political backing to make meaningful shifts in their positions.
The commodity currencies all finished within 10 pips of opening levels. Oil helped the loonie earlier on reports of drone attacks on Saudi oil infrastructure but the move faded.
Bitcoin hit $8330 as it more than doubled from April 1 levels but backed off to $7763 to finish the day lower. Talk about crypto has certainly ramped up.
