Forex news for North American trading on September 8, 2021
- Fed's Williams continues to campaign to separate taper from liftoff date
- Furor grows over active trading from Dallas Fed President Kaplan
- WTI crude oil futures settle at $69.30
- Cable fights all the way back to unchanged on the day
- Beige Book: Beige Book: Economic growth downshifted slightly to a moderate pace in early July through August
- Fed's Williams: It could be appropriate to start taper this year
- Scotia after the BOC decision: We expect CAD to outperform through year-end
- U.S. Treasury auctions off 10 year note at a high yield of 1.338%
- More comments from BOE officials on rate hike prospects
- US EIA oil forecasts sees lower US supply this year
- European indices end the session with declines across the board
- BOE's Bailey: We are seeing some short-term leveling off in the recovery
- Natural gas continues to sizzle: Breaks $5 for the first time since 2014
- Full text of the Bank of Canada Sept 8, 2021 statement
- US July JOLTS job openings 10.934M vs 10.03M estimate
- Bank of Canada: Rates unchanged, QE pace unchanged
- Debt ceiling: Yellen says most likely case is that the cash runs out in October
- Commodity bulls have been searching for a market to corner and now they've found the perfect target: Uranium
- The NZD is the strongest and the CAD is the weakest as NA traders enter for the day
The fundamental stories for the North American session today saw:
- The Bank of Canada Rates keeping rates unchanged as expected.
- The Bank of England members split on whether the minimum requirements have been met for raising rates, but see some short term leveling of the economy.
- The US July JOLTS data rising for the seventh consecutive month and is at the highest level on record indicative of a labor market has plenty of job openings and not enough workers.
- The U.S. Treasury once again showing that demand for their benchmark 10 year yield from international investors remains high as yield spreads favor the US.
- Fed's Williams is still favoring tapering, and considers the taper to be totally separate from liftoff of rates
- The beige book signaling that economic growth had downshifted to a more moderate pace in July through August.
That hodgepodge of data helped to send the dollar up - mainly on the back of the better JOLTs data and some technical buying of the greenback. However, that run higher which took the greenback to the strongest of the majors in the morning session, saw those gains evaporate as focus turned toward comments from BOE officials, a reversal of the run lower in the CAD after reaction to the BOC decision, and a move lower in US rates helped along by the 2nd consecutive month of ultra strong demand from foreign investors in the 10 year note auction.
Looking at the ranking of the strongest to weakest of the major currencies, the NZD is the strongest currency for the day while the CAD remains as the weakest (although well off its lows for the day too). The USD is higher with most of its gains vs the CHF, CAD and AUD. The greenback nearly retraced all of its gains vs the GBP by the close, and was near unchanged verse the JPY and NZD as well.
In other markets, the US debt market saw its benchmark 10 year yield moved to a high of 1.377% before move back to the downside. It is currently trading at 1.338% after reaching as low as 1.327% after its successful auction. The U.S. Treasury will auction off 30 year bonds tomorrow at 1 PM.
In the US stock market, three major indices ended lower on the day with the NASDAQ index the weakest after closing at a record level just yesterday. A snapshot of the closing levels shows:
- Dow industrial average -68.93 points or -0.2% at 35031.08
- S&P index -5.94 points or -0.13% at 4514.01
- NASDAQ index -87.68 points or -0.57% at 15286.65
The NASDAQ index closed below its 50 hour moving average for the first time since August 20.
- Spot gold is trading down $4.39 or -0.24% $1789.57. It traded as high as $1802.16 and as low as $1782.53.
- Spot silver is trading down $0.35 or -1.42% at $23.95
- WTI crude oil futures rose $1.03 or 1.51% at $69.38
- The price of bitcoin fell for the second consecutive day. It is currently trading down $828 or -1.77% of $4618.56. Some of the froth from the NFT market has come out of the market although Ethereum is trading marginally higher today
Looking at some of the currency pairs:
- EURUSD. The EURUSD move down to test a swing area between 1.1800 and 1.18044. Support buyers leaned against the level and pushed price back higher into the close. The pair is just above the 38.2% retracement of the move up from the August 20 low. That level comes in at 1.184148. It is also below its 200 hour moving average at 1.18385. The breaking of the 200 hour moving average today was the first move below that level since August 25. Stay below the 200 hour moving average in the new trading day keep the sellers more control.
- GBPUSD: The GBPUSD fell down to test its support area between 1.37257 and 1.37316. The buyers leaned against the level and after breaking back above its 50% midpoint of the range since August 20 at 1.37464, the sellers turned the buyers in the price will back toward unchanged on the day. The price of the less is closing below its 200 hour moving average at 1.37930. The current price trades at 1.3773. In the new trading day, stay below the 200 hour moving average keeps the sellers more in play for May short term perspective. A break back below the 50% at 1.37464 would increase the bearish bias with support at 1.37257 as the next target.
- USDCAD: The USDCAD moved above a ceiling near 1.2708 after the back of Canada rate decision. The price moved to a high of 1.2761, but could not extend to the next target near the 61.8% retracement of the range since August 20. That level came in at 1.2774. Buyers in the pair turned sellers in the price nearly retraced its entire move higher. It did find support near a swing area between 1.2638 at 1.26527. In the new trading day a break below 1.2638 will be needed to increase the bearish bias. A move below would have traders looking toward the 200 hour moving average 1.28928. Stay above that level and the swing highs going back to August 27 and earlier today near 1.2708, would be the next upside hurdle followed by the 50% midpoint at 1.27204
