ForexLive Americas FX news wrap: Trump flexes his jawbone
Forex news for US trading on April 12, 2017:
- Trump says he likes low-interest rate policy
- Trump says he won't label China currency manipulator, breaking election promise
- Trump: US dollar is getting too strong
- Bank of Canada holds rates at 0.50% but boosts growth forecast
- BOC's Poloz: There is too much uncertainty, it's a little too soon to make conclusion on interest rates
- US budget deficit for March comes in at -176.2b vs -169.0b est.
- Schaeuble continues to German tradition of chiming-in on European elections
- Lavrov: We agreed to continue cooperation on Syria
- US 30-year bonds sell at 2.938% vs 2.929% WI
- BOC's Poloz: A rate cut remains possible if risks are realized but was not on the table
- BOC's Wilkins: Data has been stronger than expected
- EIA weekly US oil inventories -2166K vs -1500K expected
- Fed's Kaplan sees US 2017 growth in excess of 2% in 2017
- Trump touts 'very good' call with China on North Korea
- Teranet Canadian March house price index +13.5% vs +13.4% y/y prior
- US March import price index +4.2% vs +4.0% y/y expected
- UK says it won't act as a tax haven after Brexit says EU's Moscovici
- 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.