Forex news for North American trading on July 20, 2018:
- Canada June CPI +2.5% vs +2.3% y/y expected
- Canada retail sales for May 2.0% vs. 1.0% expected
- G20 draft: Global growth outlook still positive but risks increasing
- CFTC Commitments of Traders: JPY shorts increase right before a Friday surge
- SNB's Jordan: Global economy on a relatively strong path
- Fitch affirms Canada at AAA with a stable outlook
- The NY Fed Nowcast for Q2 comes in at 2.7%, down from 2.8% last week.
- German minister downplays this weekend's G20
- BOJ may debate modifying yield curve target to allow for natural rise in long-term rates
- Fed's Bullard says he doubts Trump's comments will have an effect on Fed
- Trump 'ready' to put tariffs on all Chinese goods
- Trump warns that others are manipulating FX and says 'tightening now hurts'
Markets:
- Gold up $8 to $1231
- WTI crude up $1.00 to $70.46
- S&P 500 down 3 points to 2801
- US 10-year yields up 6 bps to 2.89%
- CAD leads, USD lags
Canadian economic data was on the agenda and it delivered a positive surprise that sent USD/CAD quickly down to 1.3125 from 1.3235. The drop compounded weakness in the US dollar that was triggered by Trump pining for lower Fed rates and talking about a bigger trade war with China.
The dollar selling hardly took a break throughout the day. USD/JPY started new York trade near 112.50 and sagged a cent lower in steady selling that continued right into the close.
Cable bulls showed their mettle with a big bounce to 1.3132 after falling below 1.30 and to an 8-month low yesterday. It's a potential reversal but it's still tough to fall in love with the pound after that CPI print and with the Fed still hiking rates.
I mean, is Trump tweeting about rates going to change the Fed path? That's the question to think about on the weekend.
EUR/USD clocked a strong finish to the week in a raise to 1.1723 from 1.1630 before Trump tweeted. There was a bit of extra dollar selling into the weekend, perhaps on worried about more tweets to come.
The Australian dollar was stronger and is testing Thursday's high near 0.7440 in what will be an early level to watch.
Have a great weekend.
