Forex news for NY trading on November 18, 2019

In other markets near the day's end:

  • Spot gold plus $2.94 or 0.20% at $1471.24. The low was down at $1454.61. The high extended to $1474.20
  • WTI crude oil futures is trading down $0.81 or -1.4% at $56.91. The low reached $56.55. The high extended to $58.09 (see post here)

There was limited economic data in the US/Canada today. The only economic release was the NAHB housing market index for the month of November which came in touch weaker at 70 versus 71 estimate and 71 last. The impact was negligible.

Other than that, early in the New York session there was a report from CNBC's Beijing correspondent Eunice Yoon that the:

Mood in Beijing about #trade deal is pessimistic, government source tells me. China troubled after Trump said no tariff rollback. (China thought both had agreed in principle.) Strategy now to talk but wait due to impeachment, US election. Also prioritize China economic support.

That report took the market by surprise and premarket gains in stocks were quickly erased with the indices moving lower. Higher yields turned to negative on the day, and gold price surged $20+ from the session lows.

Risk flows also sent the JPY and CHF higher (typically investor flows move into the relative safety of those 2 currency pairs), while the AUDUSD and the NZDUSD moved lower (also a Pavlovian reaction to the risk off flows.

The EURUSD was also supported (USD lower). However, the moves and that currency might have been helped by comments from ECB Lane that "Europe needs a big conversation among fiscal policymakers about how to stimulate the economy". If there is any hint of fiscal stimulus out of Europe that should help the EURUSD. The the price of the euro moved from a New York session low of 1.1053 to a high of 1.10894. That high also happened to be right where the 100 day moving average is found today. Sellers have push the price off of that level to a closing level at 1.1072. In the new day it will take a move above the 100 day moving average to get the buyers going again.

Later in the morning there was a report that the Fed Chair Powell, US Pres. Trump and Treasury Secretary Mnuchin had an unscheduled meeting in the private quarters of the White House.

After the meeting Pres. Trump did not call Powell names or say he was doing a horrible job, instead tweeting he had "a very good and cordial meeting" where they discussed "interest rates, negative interests, low inflation, easing, dollar strength, and its effect on manufacturing, trade with China, EU and others, etc.".

Of note, the Pres. did not specifically say they talked about tariffs and it's impact, on the economy, but then again, what Powell might say is certainly not what the President thinks or says.

The stock market took the meeting constructively, and there was a rebound in stocks into the close. In fact the major indices closed once again at record high levels. European major indices did not fare as well, closing off low levels but still mostly negative on the day.

US stocks close higher once again while the European indices moved mostly lower

In the US debt market, yields remained below the unchange level, with the 10 year losing the most ground at -1.7 basis points on the day.

The US yields moved lower in trading today

A final look at the snapshot of the major currencies, showed the GPB was the strongest (see below). Most of the gains in the GBPUSD were finished in the early part of the London/European session. Gains were attributed to increase confidence that the Conservative Party would gather enough seats at the upcoming election to hold the majority. The New York session saw modest up and down movement in the pair.

The weakest currency on the day was the AUD and the NZD on some risk off flow trading.

The USD was mostly lower with declines versus all the major currencies with the exception of the AUD and the NZD.

The GBP was the strongest while the AUD was the weakest.