Forexlive Americas FX news wrap: ECBs TLTRO3 started. US considers delaying Mexico tariffs

Author: Greg Michalowski | Category: News

Forex news for NY trading on June 6, 2019

A snapshot of other markets are showing:

  • Spot gold is hanging on to a $3.50 gain or 0.26% rise at $1332.91. The high-priced extended to $1339.95. The low reached $1327.15
  • WTI crude oil futures are trading up $1.60 or 3.10% at $53.28. Hopes that OPEC will be able to get supply in order and that the global terror fears would subside are helping the rebound today.
  • Bitcoin on Coinbase is trading down $-50 at $ 7681.63.  The low reach $7458.41. The high extended to $7871.13
The US stocks closed higher on the day with the Dow Jones leading the way at up 0.71%. European shares ended the session mixed today.  

Forex news for NY trading on June 6, 2019The US yields are ending mixed with a flattening of the yield curve. The 2 year yield is up the most at +3.6 bps. The 30 year bond's yields is down the most at -2.6 bps.

the US yields for ending the session mixed with a flatter yield curve

The snapshot of the major currencies are showing that the EUR is the strongest, while the JPY is the weakest.  The USD was also weaker with most of its decline vs the EUR, CAD and CHF. 

The EUR is the strongest 
The ECB announced the terms of the TLTRO3 program, but also said interest rates to remain at their present levels at least through the first half of 2020. That was construed as less dovish, as the market was looking for a sign that rate cuts could be right around the corner. This action was was seen as a more wait-and-see indication. 

Nevertheless, although the EURUSD kept most of the gains for the day (it is trading up 52 pips) near the close, it was not a smooth ride.  The pair was able to get above the 100 day MA but did find sellers smack dab against a topside trend line at the 1.13084 level. That limited the price action higher. The pair is closing right near it's 100 day MA at 1.12738.  Traders are still struggling with the idea of the EURUSD going higher (at least for now). 

The EURUSD stalls at topside trend line....
In other market moving news today, the US/Mexico negotiations for ebbed and flowed with tariffs on and tariffs off. 

A Washington Post article in the NY afternoon stating that Mexico had pledged up to 6000 national guard troops at its southern border to stem the flow of illegal immigrants, helped send stocks higher, and the USDJPY to a new high for the day at 108.557 (and week - the pair has been in a narrow 66 pips range this week).  

However, just when you thought a deal was imminent, a White House spokesperson is on the wires now saying the US is moving forward with tariffs.  

I am not one to believe in market manipulation, but it sure seems like if someone knew the next headline on trade (whether US-Mexico, US-China, or future problems with US-EU), you could make ton of money trading the swings.....Others are feeling that Pres. Trump is just looking to enact the border security tariff as a way to tell his base that Mexico tariffs are helping build the wall.  

Anyway, for all the excitement,the new week range for the USDJPY is now up to 75 pips for the week from 66 previously. 

The USDCAD erased all the gains from yesterday today (up yesterday, down today) and in doing so is also testing the May 22 low at 1.33536. The low today reached 1.3359.   The move lower takes the price closer to its 100 day MA at 1.33486.  The last time the price traded below the 100 day MA was back on April 17.  

Fed speak today had Kaplan and Williams speaking. Both expressed concerns about risks to growth, but both also stopped short of saying they are "all in" on a cut.  

Tomorrow sees the Canada and US employment reports released at 8:30 AM ET.  It will be a welcome relief from the political headlines (at least over those minutes).  However, with the clock ticking toward the Monday deadline, it seems that traders will have to deal with the risks (and squaring up flow) into the close.  We could be in for another choppy session.  

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose