Forex news for North American trading on August 16, 2021
- Fed's Kashkari: I believe these will be short-lived high inflation readings
- Major indices close lower but it could've been worse
- Palm Beach County set to declare state of emergency because of Covid
- WTI crude oil futures settle at $66.59 barrel
- Feds Powell: Fed is in process of putting away its tools designed for actual emergencies
- Atlanta Fed GDPNow rises to 6.2% from 6.0% prior
- European shares close mostly lower. UK FTSE 100 an exception
- The global dairy trade price was up 0.3% to $3827
- US business inventories for June +0.8% versus +0.8% estimate
- US NAHB housing market index for August 75 versus 80 estimate
- US July industrial production 0.9% versus 0.5% estimate
- Canada foreign securities purchases for June 19.63 billion versus 20.8 billion last month
- US July retail sales -1.1% vs -0.2% expected
- Canada housing starts for July 272.2K versus 282.1K last month
- The CHF is the strongest aat the starrt of the New York sessionnd the NZD is the weakest as NA traders enter
the US retail sales came in weaker than expected at -1.1% versus expectations of-0.2%. The core measure also was weaker than expected at -0.4% versus +0.2% estimate. However, almost from the release, the US dollar moved higher despite the weaker data. That trend continued for most of the day with the USD being the runaway strongest of the majors, while the NZD was the runaway weakest. The general thought was that the flow of consumer funds was going more towards services vs goods which is what most of the retail sales reflects (although there is a measure for food and drinking establishments which indeed rose 1.7% for the month. It is the only service category in the report though).
The NZD was weaker after the Prime Minister declared a national lockdown after finding a single case of Covid. That took place in the Asian session, and NZD got weaker and weaker throughout the day.
Also helping the dollar, was a reversal of yields across the maturity spectrum. at the start of the New York session, the benchmark 10 year yield was at 1.227%. It is ending the day at 1.265% after reaching side 1.273% intraday. The 30 year yield moved from 1.897% to the current yield of 1.924%.
The US stock market saw the S&P and Dow industrial average snap their five day winning streak today (and also 5 day's of record closes). that may have led to a move into the relative safety of the dollar (at least on paper).
The NASDAQ index closes lower for the second consecutive day. The Dow fell as much as -505 points intraday, but closed down -282.12 points or -0.79%. The NASDAQ was the worst performer with a decline of -0.93%, but it too closed well off it's lows of -1.64%.
In other markets near the end off day close:
- Spot gold fell $1.200 or -0.07% at $1785.76.
- Spot silver fell $-0.19 or -0.79% at $23.65
- WTI crude oil futures fell $0.90 or -1.34% at $66.49
- Bitcoin ended lower by $945 at $44,984..72
going into the new day:
- The EURUSD's decline took the price to within five or so pips of its 2021 low at 117.035. The pair is trading at 117.085 currently. In the new trading day, a move below the low should open up thee door for further downside momentum
- The GBPUSD fell below its 200 day moving average for the first time since July 22 at 1.3777. The price extended toward the 61.8% retracement at 1.37284 and found some profit-taking around that level. Going forward stay below the 200 day moving average above keeps the bears more control. Move below the 61.8% retracement followed by the swing low from July 23 at 1.37192, and there should be more downside momentum
- The USDJPY moved up to test its 100 day moving average at 109.657 and found willing sellers against the key moving average level. The price fell back down toward 109.50 before rotating back up toward 109.57 near the close. The 100 day moving average will be the key barometer in the new trading day for both buyers and sellers. Move above would be more bullish with the falling 100 hour moving average at 109.843 as the next target. The 200 hour moving averages at 110.047. On the downside the 109.35-109.39 area is a support target..
- The RBNZ rate decision will take place in the new trading day. The price of the NZDUSD fell sharply on the back of the lockdown but did stall near July swing low levels between 0.6880 and 0.6898. A move below that area, would open up the door for further downside momentum. Conversely a move back above the 0.6956 level would be a clue that the buyers were feeling more confident.
