Forex news for North American trading on September 24, 2020:
- US initial jobless claims 870K vs. 840K estimate
- US August new home sales 1011K vs 890K expected
- BOE's Bailey: We should have negative rates in toolbox
- France daily coronavirus cases jump to a record 16,096
- UK reports highest ever COVID daily case count at 6634 cases
- Mexico lowers benchmark rate to 4.25% from 4.50%
- Fed's Evans: More fiscal relief needed
- Fed's Barkin: Having rates lower for longer does not mean 0% forever
- Fed's Bullard says 'sort of full recovery' possible this year
- More from Fed's Bullard: Fed policy is in great shape right now
- Powell: There is downside risk to economy if no further gov't support
- KC Fed manufacturing index +11 vs +14 prior
- BOE's Bailey: We should have negative rates in toolbox
- Fed's Rosengren: There are headwinds ahead for the US economy
- Fed's Brainard seen as front-runner for Biden's Treasury Secretary role
Markets:
- Gold up $5 to $1869
- S&P 500 up 9 points to 3246
- US 10-year yields down 1 bps to 0.66%
- WTI crude oil up 29 cents to $40.22
- CAD leads, AUD lags
This was one of those days where no one is leaving happy. The back-and-forth in risk sentiment were a trap in every direction and multiple times. Then when you look back at the final tally, nothing moved all that much overall.
The main move in North American trade in FX was a recovery in commodity currencies, led by the loonie. There was a strong bid in the loonie that might have been exaggerated by oil settlement flows (along with an improvement in oil prices).
Another point worth emphasizing is that when US equities stumbled early, the commodity currencies held up. AUD/USD formed a minor double bottom at 0.7015 and it was off to the races up to 0.7070 with equities following.
EUR/USD was stuck close to 1.1635 for hours but once it broke above 1.1650 to the upside the momentum carried it to 1.1687 at the New York high. It gave some back late as did all dollar trades as equity markets turned a big gain into a flattish day.
EUR/CHF also held a solid bid after the SNB. They're going to be publishing FX intervention data on Sept 30 in a new report and that's going to be one to watch.
