Forex news for North American trade on February 27, 2019:
- US December factory orders +0.1% vs +0.6% expected
- US January pending home sales +4.6% vs +1.0% expected
- India and Pakistan are in the midst of a major skirmish
- US December retail inventories +0.9% vs +0.2% expected
- US December advance goods trade balance -$79.5B vs -$73.9B expected
- Canada January CPI 1.4% vs 1.4% y/y expected
- Brexit: Labour will put forward motion on second referendum
- Lighthizer: Trump wants a deal with Mexico and Canada on steel
- Lighthizer: Objective in China FX agreement is not to have competitive devaluations
- Lighthizer: China deal will be binding but won't be submitted to Congress
- Lighthizer: China purchases alone are not enough for a trade deal
- Fonterra raises milk price forecast to $6.30-6.60/kg
- ECB's Villeroy: Should study adverse impact of negative rates
- Powell: We are going to be in a position to stop run-off of balance sheet this year
- Weekly US crude inventories -8647K vs +3000K expected
- UK PM May: Continuing to push for legally binding changes to the backstop
Markets:
- Gold down $9 to $1320
- WTI crude oil up $1.45 to $56.95
- US 10-year yields up 4.9 bps to 2.68%
- S&P 500 down 1.5 points to 2792
- GBP leads, AUD lags
The pound continued to make headway and touched a high of 1.3350 with an extra lift from fixing demand. It fell back to 1.3306 late but finished the day up another 55 pips after a 160 pip rise on Tuesday. The votes didn't move the needle but once again exposed the rift within the Conservative party as more than 80 MPs abstained or voted against the government.
The trend in USD/JPY was the defining feature of North American trade as the pair rose to 111.00 from 110.40. The backdrop was a rise in Treasury yields with the 10-year yield climbing above the downtrend since mid-December.
EUR/USD finished the day lower after a brief rise above 1.1400. In the end it was an inside day and the euro ended at 1.1372.
The commodity currencies moved in opposite directions. The Canadian dollar climbed with a tailwind from oil on tighter US inventories. USD/CAD fell as low as 1.3118 but rebounded to 1.3154 as the US dollar strengthened in the latter half of US trading.
AUD/USD and NZD/USD were both under consistent pressure in North American trade with the Aussie down to 0.7127 and kiwi to 0.6835 at the lows. Both moves wiped out the past two days of gains.
