Forex news for Americas trading on September 4, 2019:
- Bank of Canada interest rate 1.75% vs 1.75% expected
- Full text of the Sept 4 Bank of Canada decision
- Carney: Data isn't signalling global recession, still a ways to go
- UK parliament votes to block no-deal Brexit until at least Jan 31, 2020
- US trade balance for July $-54.0 billion billion versus $-53.4 billion estimate
- Canada July trade balance -1.12B vs -0.35B expected
- Fed's Beige Book: Economy appeared to expand at a modest pace
- Fed's Kashkari: Tariffs, trade wars are concerning businesses
- Deere sold 30-year bonds at a record low of 2.877%
- Fed's Kaplan says he will assess data and outlook for upcoming decision
- Fed's Kaplan: Not surprising that factories weak when trade is weak
- ISM New York business conditions 50.3 vs 43.5 prior
- Italy's Conte accepts President's offer to form new government
- Fed's Williams: Revisions to payrolls and GDP suggest momentum less robust
- More from Williams: Still data to come before Fed decision
- Canada Q2 labor productivity +0.2% q/q vs +0.1% expected
Markets:
- Gold up $7.50 to $1554
- S&P 500 up 31 points to 2937
- US 10-year yields flat at 1.46%
- WTI crude oil up $2.42 to $56.36
- Pound leads, yen lags
The US dollar was strong yesterday but it gave it all back today with the loonie and pound especially strong.
The Bank of Canada held rates unchanged and that was expected but the statement didn't offer any clear hints about a cut in October. That's 62% priced in but it doesn't sound like Poloz is eager to deliver. As a result, USD/CAD fell to 1.3280 from 1.3325 initially and then slid another 50 pips to the lows.
GBP/USD had its best day since May as part of a three-day reversal and part of yesterday's two-year low. The vote wasn't a surprise in parliament but the market has come around to the idea that a no-deal Brexit will not get through government, at least not in this iteration. It still has a long way to go to.
USD/JPY bucked the soft-dollar trend on an improving risk trade. US stocks are now back to the top of the range and the day and is going to be big. At the same time, yields didn't move higher today on a better risk trade and gold shook off early losses and touched fresh cycle highs. As for USD/JPY it rose 40 pips but is square in the center of the range.
AUD/USD was impressive again as it recovers from the August lows for a third time. It tracked all the way to 0.6801 and is finishing near the highs.
