Forex news for New York trade on January 26, 2021:
- US Jan Conference Board consumer confidence 89.3 vs 89.0 expected
- FHFA house price index for November 1.0% vs. 0.8% estimate
- Richmond Fed manufacturing index for January 14 vs. 19 estimate
- November US Case-Shiller house price index 9.08% y/y vs +8.7% expected
- IMF boosts 2021 GDP forecast to 5.5% from 5.2%
- ECB's Villeroy: Inflation could exceed 2% temporarily under ECB goal
- Dallas Fed services index +0.8 vs +4.2 prior
- S&P puts most major oil companies on negative ratings watch
- US 5-year Treasury auction 0.424% vs 0.426% WI
- It is now officially Treasury Secretary Janet Yellen
Markets:
- Gold down $4 to $1851
- US 10-year yields up 1 bps to 1.038%
- WTI crude down 24-cents to $52.43
- S&P 500 down 6 points to 3849
- NZD leads, USD lags
The FX market was busy selling US dollars on Tuesday. It looked to me like a delayed reaction to the drop in yields on Monday because there wasn't much to move on today with bonds and stocks quiet (aside from the madness in meme stocks).
Cable was particularly strong. It fell at the London open on jobs data but steadily rebounded and then soared to 1.3740 on strong demand into the London fix.
The commodity currencies were the other big beneficiaries of a week dollar, despite a mediocre risk backdrop. The kiwi rose to the highest since January 8 and both AUD and CAD were strong after dips to daily lows in early London trade.
The euro and yen also made some minor headway against the US dollar. The euro was briefly jolted lower by ECB jawboning about the currency but this market has gone to the 'waddaya gonna do?' school and didn't fret the tough talk for long.
