Forex news for New York trade on June 20, 2019:
- China and US trade teams are set to meet as early as next Tuesday
- Hunt and Johnson are in the finals for the UK Tory PM
- Trump on Iran: Does not feel his administration is pushing him toward conflict
- Iran's foreign minister: US is lying about drone being in international waters
- Eurozone June advance consumer confidence -7.2 vs -6.5 expected
- QuadrigaCX founder moved customer funds into his personal account - auditor
- Canada May ADP employment -16.0K vs +24.0K prior
- June Philly Fed +0.3 vs +10.4 expected
- US initial jobless claims for the current week 216K vs 220K estimate
- Erdogan says Turkey will retaliate against any US missile sanctions
Markets:
- CHF leads, USD lags
- Gold up $29 to five-year high of $1389
- WTI crude up $2.89 to $56.65
- US 10-year yields down 2 bps to 2.00%
- S&P 500 up 29 points to 2955
The market took some time to digest the Fed decision but the final verdict is in and it's even more dovish than it first seemed. The result was heavy selling in the US dollar, a record high in stocks, a give year high in gold and a 5.4% rally in WTI (helped by Iran tension).
it was a major day throughout the market. The biggest mover in FX was USD/CHF as it fell to 0.9800 after touching parity hours before the Fed decision. That's the lowest since January.
Many of the flash crash lows are now in play with USD/JPY hitting the lowest since Jan 3 in an 80 pip slide. The market is pricing in a 36% chance of a 50 bps cut in July and US 2-year yields fell as low as 1.69%. The pair finished near the lows of the day.
EUR/USD made steady progress in early European trading but stalled out as New York arrived after hitting 1.1317. It pulled back to 1.1280 but has since leveled out at 1.1290.
Cable followed a similar shape as it hit 1.2725 before sliding down to 1.2675 on the BOE decision and then grinding up to 1.2700. Carney's Mansion House speech avoided talk on monetary policy.
USD/CAD was a big mover with the BOC looking to hold rates as everyone else cuts. USD/CAD hit a three-month low of 1.3151 before it founds support there in a bounce to 1.3200. The other commodity currencies kept pace as the market smiles on global growth prospects and commodity demand as we return to an era of cheap money.
Gold made a major move after yesterday's close above $1350 fired up the technical case for longs. A series of levels quickly fell about it in a race up to $1390 in a 2% rally that sets the stage for more.
