Forex news for Americas trading on Aug 21, 2019:
- FOMC minutes: Most Fed officials viewed cut as mid-cycle adjustment
- US July existing home sales 5.42m vs 5.39m expected
- Canada July CPI 2.0% vs +1.7% y/y expected
- Macron: Boris Johnson's Brexit terms are not workable
- Merkel: Our goal is to continuing having tight relations with Britain after Brexit
- UK's Corbyn invites all leaders of other parties to meet on tactics to stop no-deal
- CBO boosts US budget deficit forecasts, sees nearly $1 trillion in FY 2019
- US weekly EIA oil inventories -2732K vs -1500K expected
- French official: Baseline scenario now seems to be no-deal Brexit
- IMF says monetary easing unlikely to make a lasting improvement in trade balance
- Germany is considering a ban on negative interest rates for retail savers
Markets:
- S&P 500 up 24 poitns to 2924
- WTI crude down 23-cenmts to $55.89
- US 10-year yields up 3.2 bps to 1.58%
- Gold down $5 to $1502
- CAD leads, CHF lags
The day got underway with Canadian CPI data and it was hotter than expected, sending USD/CAD quickly down to 1.3256 from 1.3290. It stalled there in part due to support from lows on Monday and Friday. A second attempt also failed then the pair began to creep higher as oil prices reversed lower, in part due to a build in distillates in the EIA report.
The Fed minutes were practically a non-event in terms of market moves initially. EUR/USD and AUD/USD slipped 10-15 pips but immediately bounced back. Later, the market started to take the approach that rate cuts are less likely and front end yields rose, helping to lift the US dollar late.
USD/JPY finishes the day near the highs, up 38 pips to 106.63. It sagged to 106.38 early in US trading but took out the Asia high of 106.60 late.
Cable skidded lower on Brexit talk from France and the failure to accomplish anything in the Merkel-Johnson meeting but the fall was minor and bids at 1.2100/10 picked up the pair for a rebound to 1.2150 before USD strength sent it back to 1.2125.
The euro was stable for most of the day until USD demand late sent it 15 pips lower to 1.1085. It remains within a 60-pip range this week.
