Forexlive Americas FX wrap: Dollar goes lower, and stocks love it
Forex news for NY trading on January 26, 2018.
- US stock surge into the close. Records once again.
- CFTC commitment of traders: EUR speculative longs remain near record high levels.
- GBPUSD's 100 hour MA catching up to the price. One of two key levels going into next week.
- Wayne Gretzky said you miss 100% of shots you don't take
- US crude oil futures settle the week at $66.14
- BOJ Kuroda: Did not revise inflation outlook at Davos
- Up, up and away. The Nasdaq up 0.87% on the day
- NY Fed Nowcast for 1Q GDP see growth at 3.09% vs 3.07% last week
- For the AUDUSD, the buyers remain the winner in this currency pair
- Baker Hughes US oil rig count 759 vs 747 prior
- What's on the US economic calendar in the week ahead
- European major indices end session with gains
- BOC's Poloz: We are globally moving to a slower-growth path but not stagnation
- S&P 500 hits Goldman Sachs' target for the year but their 'irrational exuberance' model intact
- Massive scale of Japanese exchange cryptocurrency theft comes into focus
- USD/JPY nears support after Kuroda cited progress on inflation
- BAML has 'greater confidence' in a shift at the RBA
- If the EURUSD is to go lower from here, it must stay below 1.2469
- BOE's Carney: 80% of G7 recovery is led by investment, trade
- Kuroda: The Japanese economy is expanding moderately, will continue
- Lagarde: Let's face it, we're in a cyclical upswing
- Mnuchin says he wasn't try to move the US dollar with his comments
- US Dec advance trade goods balance USD -71.6bln vs -68.9bln exp
- Q4 US GDP (first reading) +2.6% vs +3.0% expected
- Canada December CPI +1.9% vs +1.9% y/y expected
- US December provisional durable goods orders 2.9% vs 0.8% exp
- US December prelim wholesale inventories +0.2% vs +0.4% expected
- Trump: America is open for business and competitive once again
- The snapshot at the start of NY day shows the AUD is the strongest, while the USD is the weakest
In other markets near the end of the week:
- Spot gold up $2.08 or 0.15% at $1350
- WTI crude oil futures of $.70 course 1.08% and $66.21
- Bitcoin on Bitstamp exchange is down $417 at $10,861. It is trading below the 100 day moving average (currently at $11,168).
- US yields are higher: 2 year 2.116%, up 3.2 basis points. 5-year 2.4669%, up 4.6 basis points. 10 year 2.656%, +3.9 basis points. 30 year 2.910%, up 3.0 basis points
Trump spoke earlier in the day in front of an international audience of dignitaries, government and business leaders at the World Economic Forum in Davos, and promoted his "America First" message (it is less grating then "Make America Great Again"). He did it in an non-confrontational way, and did not wander from the teleprompter (which is always good).
With the major US indices up 25% to $32% over the last 12 months, it could be argued, the high tide in the US is lifting all boats/economies. Today although GDP was lower than expectations (2.6% vs 3.0% estimate), it was not because consumption was weak. That rose by 2.6% annualized, investment was up too (by 0.6% and would have been higher if not for inventories which subtracted -0.67%). Indications are that investment will grow over time. The drag (in addition to inventories)? Net trade. That part of GDP was a net subtraction of -1.13% as the US continues to import more than it exports.
Trump message today was for the world to investment dollars into the US. If goods are produced in the US, they don't need to be imported.
With a weaker dollar, and now favorable tax treatment, the government is sure making it tempting for those pieces of the puzzle to work out.
If the plan does work, it would eventually lift the USD (remember US companies also now have an incentive to repatriate overseas funds back to the US too).
In the meantime, there seems to be enough money not invested that continues to support US stocks, and the "story" in the currency market continues to support selling the USD (it is not my job to ask why, but to just follow the trend).
Moreover, the US earnings - so far - are supporting the gains. The broad indices in the US rose by 1.18% - for the S&P - and 1.28% for the Nasdaq today. Intel led the charge after beating earnings by over 20% after the close yesterday. It's stock was up over 10% today. Breathtaking.
Next week will be a big week for earnings with a slew of the high flyers scheduled to release on Wednesday and Thursday. Boeing, Apple, Amazon, Alphabet, Alibaba, Microsoft are some of the names reporting. We also have the FOMC on Wednesday, and the Trump comes back to the US for the State of the Union address. On Friday the US employment report will be released.
What the stock market, the dollar, the earnings, and Trump have done (and next week the FOMC and the employment report) is take the attention away from bitcoin. The digital currency is down about -$350, and below the 100 day MA at $11,168 (trading at $10,910). That being said, the price of Bitcoin traded every day this week above and below the 100 day MA. It seems that attention for funds and trading action is elsewhere. Nevertheless, there was a $500M confirmed hack of Coincheck today. HMMMM. Bitcoin sure seems like it could end up attracting the biggest bank robbers in history. Who needs to rob a bank when you can hack a bitcoin exchange/broker, take coins, convert to dollars and disappear. More regulation is on the way.
I have overstayed my welcome. Below is the snap shot of the winners and losers today. Have a joyful and safe weekend.