Forexlive Americas FX news wrap: Gold trades above $1600
Forex news for NY trading on February 18, 2020
- US stocks end the session with mixed results.
- What's on tap for tomorrow's North American session?
- WTI crude oil settles at $52.05
- It's pardon day at the White House
- Canada loosens mortgage rules
- US 10 year yields slip towards the bottom of the range
- USA Today: FDA has pulled inspectors from China
- European shares end the day in the red
- WHO chief: It will take 12-18 months for a coronavirus vaccine
- Gold cracks above $1600 for the first time since January 8th
- Fed's Kaplan says he sees no change in Fed funds rate though this year
- Coronavirus: WHO says there are 92 cases of human-to-human spread outside China
- US sanctions Russia's Rosneft Trading SA over Venezuela ties
- China will stabilize foreign trade and consumption - ministry
- US February NAHB housing market index 74 vs 75 expected
- New Zealand GDT price index -2.9%
- US February Empire Fed +12.9 vs +5.0 expected
- Canada manufacturing sales for December -0.7% versus 0.7% estimate
- The GBP is the strongest and the NZD is the weakest as NA traders enter for the day
The price of gold was the story of the day the financial markets. It rose by over $21 or 1.3% to $1602.38. That with the highest level since January 8 when the price extended up to $1611.42. The high price today reached $1605.19.
The catalyst for the rises seem to be concerns about the economic impact of the coronavirus. Apple reported that they would need to revise the revenue forecast for the current quarter as a result of plummeting sales in China and supply chain concerns. This comes just a few weeks after reporting their earnings and adjusting quarterly growth for the impact of the coronavirus.
That seems to spook the price of gold sharply higher. Did we get follow through risk aversion in other markets?
The NZD and the AUD were the weakest currencies of the day with the NZD leading the charge the downside. On the other spectrum, the JPY and USD are ending as the strongest of the majors.
Those flows are consistent with risk aversion. However, the moves were somewhat muted. For example most of the gains versus the US dollar versus the NZD, AUD and EUR. For the JPY pair, they were lower (JPY buying) but the GBPJPY , AUDJPY, and CADJPY are trading down but midrange. The USDJPY is trading near the high for the day (see top chart below).
So although there was some flows into risk aversion, the moves were not of the runaway variety.
US debt market, yields were lower but off the lowest levels. Once again the flow into the relative safety of the US treasury market was somewhat limited.
Finally, in the US stock market today, the major indices opened sharply lower but recovered some/most of those declines.
The NASDAQ index was able to retrace all the days declines and closed up 0.02% after being down -0.57% at the lows. The S&P index and Dow more not as supported. Each of those indices closed lower on the day but both were well off their low levels
In the new trading day, traders will look to see if gold is leading the way, or if gold got a little ahead of itself and backs off back below the $1600 level