Forexlive Americas FX news wrap: Gold trades above $1600

Author: Greg Michalowski | Category: News

Forex news for NY trading on February 18, 2020

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. 

Forex news for NY trading on February 18, 2020

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.

The ranges and changes for the major currencies

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.

The US yields were lower but off the lowest levels of the day.

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

The US stock indices are ending the day lower 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

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