ForexLive Americas FX news wrap: BOC stands pat

Author: Adam Button | Category: News

Forex news for North American trade on September 9, 2020

Markets:

  • Gold up $16 to $3398
  • US 10-year yields up 1.8 bps to 0.697%
  • WTI crude oil up $1.24 to $38.00
  • S&P 500 up 67 points to 3398
  • AUD leads, JPY lags

It was turnaround Wednesday in markets as much of Monday's JPY buying and equity/commodity selling was retraced in a steady move that started in Asia and gathered momentum all day.

The news about one virus candidate pausing for a week because of a single adverse effect hit in Asia but was slowly brushed aside and instead the dip buyers had their way. US stocks opened 40 points higher and were up more than double that before some selling in the final 30 minutes.

The risks around the Bank of Canada decision were towards more dovish signals but the statement had nothing along those lines. There's a good chance that the BOC has now eased as much as they're going to and that was reflected in some CAD strength afterwards. Some of that was simple catch-up by traders who were sidelined in the hours before the decision because of event risk.

In the end, USD/CAD still trailed AUD and NZD on the day even with the rebound in oil. The fellow commodity currencies completely retraced the Tuesday moves while CAD still has some work to do to get back to 1.3100.

Cable traders took a step back. An early dip to 1.2885 was bid and it battled all the way back to 1.3000 as Brexit fears were tempered.

The euro climbed a quarter-cent and was helped along by a report saying the EU won't walk away from Brexit negotiations and that ECB forecasts will be bumped up. The market is on guard for Lagarde to talk down the currency tomorrow but it's going to be a tough task to sound dovish while economic data has largely improved.

Turning towards emerging markets, the Mexican peso rose nearly 2% and USD/MXN fell through the June bottom in a notable move.

Forex news for North American trade on September 9, 2020

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