Forex news for North American trade on May 23, 2018
- FOMC minutes: Most officials say next rate hike likely 'soon'
- Iran sets 7 conditions for European countries remaining in nuclear deal
- Canada's Freeland with the daily comments: NAFTA engagement at intense level
- Italy PM designate Conte: Will defend rights in European institutions
- Turkish central bank raises main lending rate by 300 basis points
- NAFTA: Officials said to meet in push for deal on autos
- ECB's Coeure: Eurozone expansion is strong, broad based
- Giorgetti will be Italian economy minister - report
- US weekly DOE oil inventories +5778K vs -2000K expected
- US April new home sales 662K vs 680K expected
- Eurozone May advance consumer confidence +0.2 vs +0.5 expected
- ECB's Makuch: QE has done its job and ECB can now afford to wind it down
- US May prelim Markit manufacturing index 56.6 vs 56.5 expected
- Deutsche Bank plans to cut 10,000 jobs - report
Markets:
- Gold up $2 to $1293
- WTI crude down 48-cents to $71.72
- S&P 500 up 6.5 points to 2730
- US 10-year yield down 6 bps to 3.00%
- JPY leads, EUR lags
Sentiment was sour at the start of US trading after Trump hinted in Asia that he wasn't pleased with the latest China deal. That sparked a bid in safe havens like the yen and Swiss franc. They were near the highs of the day as New York rolled in but it was a slow turn afterwards that accelerated after the FOMC minutes.
The minutes said the Fed would tolerate higher inflation, presumably without rushing to hike rates. I don't think that's a revelation but it proved to be the main catalyst for markets as S&P 500 futures went from -17 premarket to a solid close and helped to pull USD/JPY higher and lift the commodity currencies.
Oil was also a factor as a huge build in US inventories sent WTI down to $71.25 from $72.10 but the selling didn't last long as it battled back to $71.76. That wobble in crude boosted USD/CAD to 1.2900 from 1.2862 but it eventually found its way all the way down to 1.2829.
Despite the late turn in the US dollar, cable and EUR/USD struggled to come back from the lows. The euro was suffering from weak PMIs and hit 1.1676 at the lows. Cable fell as low as 1.3306 before finding bids at the figure and recovering to 1.3354.
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