Forex news for US trading on February 16, 2016:

  • February 2016 US Empire state manufacturing -16.64 vs -10.00 exp
  • February 2016 US NAHB housing market index 58 vs 60 exp
  • Fed's Harker: It might be better to wait for stronger inflation before next hike
  • Kashkari expects a gradual increase in interest rates
  • Fed's Harker: If inflation spikes higher, Fed would have to react
  • Fed's Harker: I want to see increased wages
  • January 2016 Canadian existing home sales +0.5% vs -0.6% prior
  • Canada Dec manufacturing sales +1.2% vs +0.5% expected
  • Former French President Sarkozy placed under investigation in campaign funding probe
  • UK's Cameron gets backing from the big German machine over EU negotiations
  • ECB's Mersch up in front of the red hats in Germany
  • ECB's Weidmann: QE is not necessary at present time
  • New Zealand GDT price index -2.8%

Markets

  • US 10-year yields up 2.7 bps to 1.78%
  • Gold down $5 to $1204
  • WTI crude oil down 39-cents to $29.05
  • S&P 500 up 27 points to 1892
  • JPY leads, NZD lags

It's strange to see NZD/JPY shorts as the best FX trade on the same day that stock markets in the US surged. It's partly due to skews and lagged effects as the US returns from a holiday. The kiwi was especially hit by another weak dairy auction.

In general, commodities were down with oil leading the way after yet-another feckless OPEC/non-OPEC pledge. USD/CAD fell as low as 1.3700 early in Europe on hopes the Venezuela-led meetings would result in a cut but instead it was a shaky agreement to leave production levels unchanged. USD?CAD rose as high as 1.3912 and finishes about 35 pips off the highs.

The Australian dollar was under heavier pressure as the US rolled in. After chopping around the 0.7150/75 range in early Europe and Asia it was down to 0.7082 as stops were tripped below 0.7125. The bounce late has been modest at 0.7102.

Large cable sellers arrived along with US trading to erase what had been an 80 pip bounce to 1.4500. The driver was a soft UK inflation report. The sales were non-stop in a cascade down to 1.4290. It was over by the time Europe went home and we've been chopping along the bottom since.

EUR/USD started near 1.1175 and broad USD bids knocked it down to 1.1125. That's narrowly below yesterday's low but the break didn't inspire any further selling as the pair attempts to base at 1.1124.

USD/JPY finishes the day down about 70 pips but it was essentially range-bound in USD trading with a high at 114.11 and a low at 113.60. The US range extremes were narrowly taken out on either side but there was no follow-through in a signal at the lack of commitment in the pair at the moment.