Forex news for US trading on July 25, 2016

  • Japanese to double planned spending in stimulus package -Nikkei
  • Aso expected to remain fin min in Japanese cabinet shuffle
  • July 2016 US Dallas Fed manufacturing index -1.3 vs -10 exp
  • ECB bought €17.45bn vs €16.31bn prior in latest QE count
  • What's priced in for the FOMC
  • Fed report - Daily FX volumes +1.0% y/y in April
  • BOE report- Daily FX volumes fall 9% y/y in April
  • Kocherlakota: Fed will be reluctant to raise until inflation is much stronger
  • Scotland's Sturgeon is exploring all options

Markets:

  • Gold down $6 to $1317
  • WTI crude oil down $1.09 to $43.10
  • US 10-year yields flat at 1.57%
  • S&P 500 down 6.5 points to 2168
  • JPY leads, CAD lags

The calendar was light today and the market is hunkering down ahead of the Fed and BOJ. The big story was in oil and the Canadian dollar as they fell to the lowest levels since April in tandem.

USD/CAD is definitely the chart of the day as it broke out of a May-July consolidation pattern with crude falling for the third day. The pair knocked out Friday's high of 1.3188 just as US traders arrived and then slowly climbed to a session high of 1.3242 before Europe clocked off. It was a consolidation around 1.3220 from there.

There as some drama in USD/JPY in US afternoon trading. The pair jumped 30 pips on a report of more fiscal spending in the upcoming Japanese budget. The quick move to 106.15 faded within the hour partly because of speculation this might simply be old spending repackaged in a new announcement. The pair hit a session low later but follow through was limited.

EUR/USD similarly hit a session extreme (a high in this case) as it knocked out Friday's best level of 1.0995 but it couldn't get above 1.1000. The overall range was less than 35 pips in North American hours.

Cable also took a bit of a breather ahead of a big week. It largely chopped in the 1.3100 to 1.3150 range. The daily low came early in US trading in a continuation of selling that started in London but Friday's low of 1.3080 was never challenged and it bounced to 1.3140.

The kiwi dollar is in focus in the hours ahead with trade balance numbers due but it's been at 25-pip range near 0.6990 to start the week.