Forex news from US trading on October 23, 2015:

  • China announces surprise interest rate cuts
  • China has room to cut rates says PBOC
  • Canadian Sept CPI +1.0% vs +1.1% y/y expected
  • Markit US Oct prelim manufacturing PMI 54.0 vs 52.7 expected
  • The strongest Northeastern Pacific hurricane on record is about to hit Mexico
  • Spanish recluse briefly becomes world's richest man
  • CFTC Commitment of Traders report: EUR shorts pared
  • Baker Hughes Oil rig count 594 vs 595
  • IMF said to give China strong signs of yuan as reserve currency
  • Gold down $1.50 to $1164
  • WTI crude down 13-cents to $44.60
  • S&P 500 up 22 points to 2075
  • US 10-year yields up 6 bps to 2.09%
  • AUD leads, EUR lags

China delivered a surprise rate cut and markets are loving the sound of cheap money everywhere. Stocks surged, bonds sold off but the FX market wasn't quite sure what to make of it.

AUD/SUD jumped 30 pips immediately but that was the high as it slowly turned around then quickly turned lower, falling more than a cent to 0.7200 on worries about global growth.

The bigger story might have been simply US dollar buying. A big reason the Fed didn't hike was worries about global growth, maybe those worries have been put to bed by the ECB and PBOC?

There was a non-stop bid in the US dollar and the euro fell another cent. USD/JPY was in negative territory on the day at 120.25 and gained more than 100 pips.

Even cable, where they're also talking about hiking rates, couldn't withstand the USD surge. It fell to 1.5300 from 1.5415.

The euro, pound and yen all closed at the lows as the unrelenting USD bid never ceased.

Gold was an interesting case. It rallied at first and hit $1179 from $1171 but then slumped to $1160. A strong USD is part of the story but it doesn't explain it all. Commodities in general took a hit (again growth worries) so that might explain the rest.

We're left with a day where commodities and commodity FX are saying one thing (worried about global growth) while stocks and bonds are cheerful. They might just be happy about the cheap money but that overall divergence won't last.