Forex news for New York trade on June 25, 2021:
- US May core PCE inflation +3.4% y/y vs +3.4% expected
- June final UMich consumer sentiment 85.5 vs 86.5 expected
- Canada's Trudeau aims for September snap election - report
- ECB's Lagarde: Outlook is now balanced
- Fed's Rosenberg: Stablecoins are a potential source of instability going forward
- Rosengren: I expect core inflation slightly above 2% next year
- Baker Hughes oil rig counts 372 versus 373 last week
- Fed's Kashkari: US economy is in the beginning of a very, very strong recovery
- CFTC Commitments of Traders report: Euro and GBP longs flushed
Markets
- S&P 500 up 14 points to 4280
- US 10-year yields up 3 bps to 1.52%
- WTI crude up 69-cents to $73.99
- Gold up $4 to $1779
- CAD leads, GBP lags
The PCE report was the focus of the session and inflation fears were running high. The headline was in-line with estimates but the market was braced for something higher. In response, the US dollar slid across the board and hit session lows, with particularly large falls against the commodity currencies.
It wouldn't last though as the dollar steadied itself and clawed back all of the gains and more. The rebound came as Treasury yields rose to the highest levels of the week in a global fixed income selloff. US 10s got to 1.54% and 30s to 2.17%.
Later in the day though, the bond market took a bit back and the dollar edged back lower. Fed comments weren't a large source of surprise.
The pound finished the day particularly soft as UK covid cases continue to rise. Cable rose to 1.3936 in the PCE led dollar slump but eventually fell to 1.3871 and is poised to close just above the low.
The euro didn't fare much better. It managed to touch the highest levels since the Fed but couldn't hold above Wednesday's high for long and stumbled to finish the day flat in the third consecutive doji star on the chart. That points to a big move coming up.
USD/CAD fell a quarter-cent on the day but held up relatively well given the fifth consecutive week of gains in crude. Last at 1.2300.
Have a great weekend.
