Forex news for US trading on Feb 23, 2017:
- Mnuchin sees limited impact from Trump policies in 2017
- Mnuchin no China yuan decision before April forex report
- Mnuchin: While absolute level of US debt is a concern, it's a longer-term issue
- Trump admin looking at backup plan that will push infrastructure spending to 2018
- Initial jobless claims 244K vs 240K expected
- Primary dealers survey: Fed hike seen in May or later
- Fed's Kaplan sees 2% US GDP growth in 2017
- Banks should prepare for rate hikes says Bundebank's Dombret
- US oil production hits 9 million barrels per day
- DOE weekly US oil inventories +564K vs +3250K expected
- February 2017 US KC Fed manufacturing 11 vs 20 prior
- Fed's Lockhart: 'Fairly soon' probably means in next 3 meetings
- Neutral rate has declined says Lockhart
- FHFA Dec US house price index +0.4% vs +0.5% expected
- Iran oil minister says crude above $55 not in OPEC's interest
- January 2017 US Chicago Fed national activity index -0.05 vs 0.0 exp
Markets:
- Gold up $12 to $1250
- S&P 500 up 2 points to 2356
- US 10-year yields down 3 bps to 2.38%
- WTI crude up 79-cents to $54.39
- GBP leads, USD lags
The market wants the goodies. The USD really in the election aftermath was predicated on a long slate of promises around regulation, taxes and infrastructure spending. What's becoming increasingly clear is how tough it will be to deliver, even with full Republican control.
The US dollar slump came as the market connected the dots on a series of stories playing down hopes for 2017 growth, extending timelines for stimulus and edging towards partisan politics.
USD/JPY traded in a narrowing wedge around 113.20 in Asia and early Europe then finally broke to the downside on Mnuchin's early comments. It continued down to 112.60 where it's flatlined.
USD/CAD erased yesterday's pop from poor Canadian retail sales. The pair sank on the rally in oil and general USD softness. It was a steady move down to 1.3085 from 1.3060.
EUR/USD finished up 20 pips at 1.0580 after climbing as high as 1.0595. The 1.06 level is now acting as resistance as the ebb and flow of European and US politics drives the see-saw.
Cable finished nearly 100 pips higher to the best level since Feb 9. The pair dipped in Asia then began a long climb to a high of 1.2560 with a finish near the highs.
Gold and oil both appear to be breaking out or nearly breaking out. Keep an eye on the closing levels.