Forex news for North American trading on May 20, 2021:
- US initial jobless claims 444K vs 450K estimate
- May Philly Fed 31.5 vs 41.0 expected
- ADP says Canada added 351.K jobs in April vs +267K prior
- US CPC weather forecast adds to drought concerns
- BOC: Remains concerned about household debt and rapid home price rise
- BOC's Macklem: Not as much evidence of home flipping as in 2016-17
- US treasury auctions off $13 billion of 10 year tips at -0.805%
- Fed's Kaplan: Size of unemployment benefits making workers hesitant to work
- Draghi: EU inflation is driven by raw material shortages
- Elon Musk says he won't sell any Dogecoin
Markets:
- Gold up $7 to $1876
- US 10-year yields down 4 bps to 1.63%
- S&P 500 up 46 points to 4162
- WTI crude down $1.31 to $62.05
- CHF leads, USD lags
All that worrying about taper talk was for nothing. The US dollar gave it all back as market participants took a tougher look at the Fed comments and recognized that there's no rush to taper. Besides, if the dollar couldn't rally on a big surprise in CPI, how is it going to sustain a bid on a whisper of taper talk?
The moves were steady and started well before New York trade. It was a grind lower in the dollar right across the board without and particularly jarring moves, though there was some extra GBP buying into the London close.
CAD also got moving nicely in Toronto trade despite no help from oil or industrial commodities. USD/CAD held 1.2145 on the upside yesterday and again in Asia and that kicked off a long slump to 1.2050. AUD and NZD weren't quite as enthusiastic but tailed close behind.
Overall, it was really a dollar trade today with most other currencies bunched closer together. We'll be watching cable closely in the day ahead as it nears the February high and we get UK retail sales.
