Forex news for Americas trading on October 15, 2019:
- EU and UK negotiators closing in on a draft Brexit deal, hinges on DUP support
- IMF lowers global growth forecast to 3.0% from 3.2% in July
- Boris Johnson to address backbenchers tomorrow
- Empire Fed +4.0 vs +1.0 expected
- Fed's Daly: News on US economy is 'largely positive'
- US-China deputy level talks will take place this week
- Fed discount rate meeting minutes shine a light on discontent about cuts
- DUP's Foster: We must remain within the UK customs union, entirely within the UK
- ERG leader Baker: I am optimistic we can make a tolerable deal that I can vote for
- EU and UK negotiators closing in on a draft Brexit deal, hinges on DUP support
- Canada Sept existing home sales +0.6% m/m vs +2.0% expected
- BOE's Vlieghe: Stimulus needed if Brexit uncertainty becomes entrenched
- Chinese state media: US, China have found way to resolve problem during trade talks
Markets
- Gold down $12 to $1481
- WTI crude down 69-cents to $52.90
- US 10-year yields up 3.8 bps top 1.77%
- S&P 500 up 29 points to 2995
- GBP leads, JPY lags
The US dollar was grinding higher in the early going on a general upbeat tone on global trade despite the IMF downgrade. That's when the Brexit news hit and cable, EUR/USD and all risk trades jumped. Treasury yields had been lower by turned around including a 10 bps low-to-high move in US 2s.
Cable led the way on the move with a rally to 1.2784 from 1.2640. It wasn't as quick as you might expect and unfolded over about 40 minutes before stalling at 1.2800. The figure acted as a barrier as the ebb and flow of the news on Brexit came and went.
What was different about today was that the Brexit news sparked a broad rally in risk trades. EUR/USD was taken for the ride. It had been at a session low of 1.0991 shortly before the news and jumped above 50 pips.
Commodity currencies also got a lift from the news, despite drops in oil and gold. Yen crosses were all higher on the news and on the day with GBP/JPY rising to the highest since May.
USD/JPY was buoyed by positive risk appetite that improved throughout the day. It rose to 108.85 on the Brexit headlines from 108.45 before and chopped around there in the final hours of trade.
