Forex news for New York trade on June 25, 2019:
- Fed's Bullard: It seems like a good time for 'insurance rate cut'
- Fed's Powell: Many on FOMC see stronger case for more accommodation
- Fed's Bostic: I totally agree with Powell's view that we will "act as appropriate to sustain the recovery"
- US June Conference Board consumer confidence 121.5 vs 131.0 expected
- US May new home sales 626K vs 684K expected
- Richmond Fed manufacturing index for June 3 vs 2 estimate
- April US FHFA house price index +0.4% vs +0.2% expected
- April US Case-Shiller 20-city house price index 0.0% vs +0.1% m/m expected
- Philadelphia Fed nonmanufacturing activity index 8.2 vs 17.3 in May
- Canada April wholesale sales +1.7% vs +0.2% expected
- Jeremy Hunt: October 31 is a fake deadline
Markets:
- Gold up $4 to $1423
- WTI crude oil down 11-cents to $57.79
- S&P 500 down 26 points to 2919
- US 10-yields up 2.5 bps to 1.99%
- NZD leads, GBP lags
On a day with a heavy scheduled of data and a talk from the Fed chair, it was St Louis Fed President James Bullard who stole the show as the arch-dove said it wasn't time for a 50 bps cut and called instead for an 'insurance' cut, which suggests one cut rather than a series.
The US dollar immediately rallied with USD/JPY up to 107.40 from 106.90 and 30-40 pip moves elsewhere.
His comments were mixed in shortly afterwards with Powell, who had something for everyone without saying anything truly revealing. There was also chatter from an unnamed US official who on US-China talks.
The result was the dollar losing a bit of luster and USD/JPY falling back down to 107.12. Other pairs also saw most or all of the Bullard move retrace.
USD/CAD was weak early and tested last week's low on the strong wholesale data. The market decided that wasn't enough to break the range and retraced to 1.1365 before a climb to 1.3210 on Bullard before finishing near 1.3175.
The kiwi is a big focus in the hours ahead on the chance of an RBNZ cut. The decision comes at 0200 GMT as the currency consolidates near 0.6650 following a solid move higher yesterday.
The euro hit a three-month high above 1.14 in Asia but backed off down to 1.1344 before a late rebound to 1.1373.
Cable traders are gearing up for the Hunt-Johnson showdown. Boris continues to paint himself into a corner by vowing to leave the EU on October 31 with or without a deal. That's a bluff and won't get past parliament but it's making the market uneasy and GBP/USD was under pressure throughout European trading in a fall to 1.2672 at the lows.
