Forex news for North American trading on August 2, 2018:
- BOE's Carney: One rate hike per year is the rule of thumb
- Carney: Don't assume bank rate will rise to 2-3%. Short-term factors pushing equilibrium lower
- Mexico Guajardo: NAFTA talks will cover all outstanding issues in trade talks
- Mexico Central Bank keeps rates unchanged (as expected) at 7.75%
- Apple hits the $1T milestone
- US June factory orders +0.7% vs +0.7% expected
- US weekly initial jobless claims 218K vs 220K expected
Markets:
- Gold down $7 to one-year low of $1209
- S&P 500 up 14 points to 2827
- US 10-year yields down 2.2 bps to 2.98%
- WTI crude up $1.38 to $69.03
- JPY leads, GBP lags
The Bank of England hike rates and the initial reaction was higher on a 9-0 vote but Carney's commentary dampened hopes for a series of hikes and highlighted some of the uncertainties. From the high of 1.3129, cable slumped all the way to 1.3018 and looks to be closing near the lows.
Cable was also hurt by a broader US dollar bid. There was a particular catalyst but the resilience of the US stock market today despite selloffs elsewhere is certainly a reason for optimism. Economic data was on the soft side with downward revisions to durable goods but the dollar was strong across the board in North American trade. USD/JPY rebounded to 111.63 from 111.32.
EUR/USD climbed to 1.1630 in early US trade and then started a long swoon down to 1.1588. Here's what's next.
The New Zealand dollar was dumped right back into the doldrums with a 50 pip decline to 0.6741 and is on track for the lowest close since June second and the second-lowest close of the year.
