Forex news for New York trade on September 15, 2020:
- US Empire manufacturing index for September 17.0 vs. 6.8 estimate
- US August industrial production +0.4% vs +1.0% expected
- Canada existing home sales rise 6.2%
- Canada July manufacturing sales +7.0% vs +9.0% expected
- US August import price index +0.9% vs +0.5% expected
- US backs down on Canadian aluminum tariffs. Removes them retroactive to Sept 1
- Canada won't impose retaliatory tariffs against US
- The global dairy trade price index rises 3.6% after the current auction
- WTO rules that US tariffs on China violate trade rules
Markets:
- Gold down $3 to $1953
- US 10-year yields up 0.5 bps to 0.677%
- WTI crude oil up $1.01 to $38.27
- S&P 500 up 16 points to 3400
- NZD leads, CAD lags
The defining move of the session was a bid in the US dollar that was steady in the first two hours of North American trading. There wasn't a clear catalyst for the move as it took the euro down to 1.1850 from 1.1900. Part of it might have been technical factors with EUR/USD tracing out a double top at 1.1900.
Outside of the euro the moves were generally small as AUD/USD tracked to 0.7300 after hitting a session high of 0.7343 just after New York arrived.
The shift in the dollar didn't initially spill over into other assets. The bond market was well behaved all day in the pre-Fed lead-up and stocks were initially strong. However equities cracked late in the day and the S&P 500 nearly gave it all up before a late bounce.
USD/CAD was particularly strong despite the bounce in oil prices. The surprise news of the day came as the US rescinded aluminum tariffs and Canada called off a response that was planned for today. However this isn't likely to be the final chapter as the US threatened new tariffs if a unilateral quota is breached.
Cable hit the highs of the day at the start of New York trading and then fell about 80 pips. However the selling was exhausted at the London fix and the pair rebounded to 1.2885 late. EU commentary on the prospects for a deal remains downbeat.
USD/JPY fell another 30 pips on the day but held the late- August low and there was a bounce from there with the FOMC countdown now on.
