Forex news for North American trade on July 21, 2021:
- Canada June new housing price index +0.6% m/m vs +1.8% expected
- Senate votes 51-49 against starting debate on bipartisan infrastructure bill
- Musk says Tesla will "most likely" resume accepting bitcoin
- Musk: Bitcoin not necessarily good for the environment but on balance he supports it
- Powell has broad support among top Biden aides for new term - report
- U.S. Treasury auctioned off $24 billion of 20 year bonds at 1.890%
- Bank of Canada appoints Sharon Kozicki as deputy governor
Markets:
- Gold down $6 to $1803
- US 10-year yields up 8.3 bps to 1.29%
- S&P 500 up 36 points to 4358
- WTI crude up $3.08 to $70.28
- CAD leads, JPY lags
As you can see, there wasn't much to move the fundamental needle on Tuesday but price action was busy. The theme continued from yesterday with risk trades legging higher, led by the commodity currencies and particularly the loonie. USD/CAD took a nosedive down to 1.2550 after hitting 1.28 on Monday.
Bonds were an early tell as yields ticked higher and then equities fell into line and currencies ran. AUD/USD had been lower in Europe but turned around to finish decently higher, despite the domestic covid worries (keep an eye on those).
Cable once again continues to be something akin to a perfect risk tracking trade. It looked like it could be breaking down yesterday but with a 90-pip jumped today, it's back above the old double bottom at 1.3670 and it needs to stay there or it will get ugly fast.
USD/JPY climbed back to where it was at this time last week in a rise to 110.30. It's running into a minor downtrend from the June high now as it looks for direction.
The euro touched a new three-month low early in the day but reversed to finish slightly higher. It's tough to imagine tomorrow's ECB decision will be a big mover but this pair has been locked into 50-pip ranges for awhile.
