ForexLive Americas FX news wrap: Trump flexes his jawbone

Author: Adam Button | Category: News

Forex news for US trading on April 12, 2017:

Markets:

  • Gold up $8 to $1282
  • US 10-year yields down 3.3 bps to 2.26%
  • S&P 500 down 9 points to 2344
  • EUR leads, NZD lags

It was a quiet day for the most part unless you were trading CAD through a back-and-forth chop on the BOC decision. But the US dollar made a big move late as Trump jawboned and said he likes low interest rates.

The comments were in the WSJ and the market was slow to pick up on them at first. The first headlines also only mentioned the jawboning but the comments on low-rate policy are a big deal. Trump can stack the Fed. He also walked back talk of dumping Yellen in another hint he's a dove.

EUR/USD had dipped down to a session low earlier as some geopolitical angst was relieved and the US dollar strengthened. It hit some small stops down to 1.0589 but jumped to 1.0660 on Trump's comments, which are still reverberating.

The drop helps to confirm the breakdown in USD/JPY as it sank to 109.15. Technically, that's probably the biggest development along with the continued breakdown in 10-year yields.

Cable continues to get back on its feet as it creeped up to 1.2531 from 1.2495 on the Trump jawboning. That's three days of gains this week to the best levels since April 2.

The New Zealand dollar had been the laggard before the Trump headlines but that turned a 40 pip loss into a virtually flat day of trading. Similar story in AUD/USD, which had been down ahead of today's jobs report.

There were a few chapters in Canadian dollar trading. The initial headlines sent USD/CAD lower as the BOC bumped up growth forecasts but with oil sinking, it recovered. Poloz also highlighted continuing uncertainty and housing risks. The pair was slightly lower on the day when the Trump headlines hit and that dropped it back to 1.3266 from 1.3325.

Keep an eye on gold as it continues to make new highs from the year, adding another $7 to $1282.

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