Forex news for North American trading on July 7, 2020:
- Bolsonaro tests positive for COVID-19
- Trump: Americans will get another stimulus check
- US JOLTS May job openings 5397K vs 4500K expected
- Fed's Bostic: Strain in housing market is not as severe as expected
- Fed's Clarida: We can do more and will do more if needed
- California coronavirus cases rise by 6,090 vs 11,529 yesterday - report
- US CDC reports there were 46,329 coronavirus cases yesterday vs 44,361 prior
- New York Fed weekly economic survey dips
- Arizona cases rise 3653 vs 3352 yesterday but positive % nears 30%
- New Zealand GDT price index +8.3%
- ECB's Schnabel: Some confidence indicators have been positive
- Florida coronavirus cases rise 3.6% vs 7-day average of 5.0%
- Canada June Ivey PMI 58.2 vs 39.1 prior
- Redbook US retail sales -6.9% y/y vs -5.7% last week
Markets:
- Gold touched $1797, highest since 2011, up $12
- US 10-year yields down 4 bps to 0.638%
- WTI crude oil down 35-cents to $40.38
- S&P 500 down 34 points to 3145, finishing at the lows
- GBP leads, CAD lags
Virus numbers weren't bad today but high frequency data, high positivity ratios and Fed commentary weighed, in particular comments from Bostic and Mester that the economy was 'leveling off'.
To be fair, risk trades had been on a strong run after a five-day winning streak in the S&P 500 so some weakness wasn't a shock. It also wasn't particularly aggressive in the FX market until late in the day when commodity currencies slid.
Cable was the early winner, rising to 1.2592 but gave back 50 pips after Europe went home. EUR/GBP selling was one of the reasons behind early GBP strength. The euro itself chopped between 1.1270 and 1.1300 before finishing at the lower end.
USD/JPY continues to give off mixed signals and was stuck near 107.50 after an early rally to 107.80 floundered.
The Canadian dollar was hit harder than other commodity currencies on pipeline troubles and its proximity to the US. The Mexican peso also suffered.
Gold was down in Europe but stormed back early in New York trade to take out last week's low and eventually take out (by $1) the 2013 high of $1796.
