Forex news for New York trade on April 17, 2020:
- Fed halves daily bond purchases for next week
- Baker Hughes US oil rig count 438 vs 504 prior
- Italy reports 575 new coronavirus deaths vs 525 a day ago
- New York coronavirus deaths 630 vs 606 yesterday
- Fed's Bullard: Upcoming FOMC meeting a good time to review impact of programs
- Canada coronavirus deaths rise to 1,250 from 1048
- Berkshire Hathaway top exec says it's not being aggressive: "Everybody’s just frozen"
- BOE's Bailey: A 35% drop in Q2 GDP in the UK is not implausible
- Fed's Williams: I'm optimistic but we've got some tough days ahead
- CFTC Commitments of Traders: Few heroes in this market
- France virus deaths rise 761 to 18,681
Markets:
- Gold down $33 to $1685
- WTI crude oil down 50-cents to $25.15 (June contract)
- S&P 50 up 75 points to 2874
- US 10-year yields up 2 bps to 0.65%
- NZD leads, USD lags
The US dollar was under pressure for most of North American trade as it reversed a move that took place in Asia and early in Europe. Chalk it up to flows but note that late in the day the dollar got a small lift as the Fed halved daily bond buys.
There are some serious cross-currents throughout markets. US stocks rose again and finished at the highest since March 10 but US Treasury yields are very close to the lows. Gold dropped after touching long-term highs this week and oil was wrecked in the front month as super-contango causes problems in the ETF market.
The FX market is being pulled in different directions and today's trade didn't have much in the way of fundamentals to respond to. Virus cases are leveling off in the main hotspots and there's certainly hope about treatments and reopening the economy but conviction is low.
EUR/USD fell to 1.0812 just before New York arrived and rallied to 1.0893 before London went home only to give back 20 pips in a consolidation later.
Cable made a double bottom just above 1.2400 in the past two days but didn't get over the Asian high of 1.2522 to confirm it. That will be key on Monday.
USD/JPY was lower despite the risk trade improving. That trade has certainly disconnected, owing to skews in short-term markets and there's no sign on when it will be re-established but if you look at the USD/JPY chart you see diminished directional moves in the past two weeks.
There are a number of similar charts and at some point they need to break.
The commodity currencies rode the risk trade, even CAD was higher despite the mess in energy. Interestingly, energy stocks were some of the best performers, perhaps owing to some upticks in later-dated crude contracts.
AUD/USD couldn't break the Asian high of 0.6384 in North American trade but the kiwi did in a +1% gain.
Have a safe weekend.
