Forex news for New York trading on March 27, 2017:

  • ECB's Weidmann: We have to discuss the issue of exiting expansive policy
  • Weidmann: I would like to see less-expansive policy but we don't have sustainable price growth
  • Dallas Fed manufacturing index 16.9 vs 22.0 expected
  • ECB buys €14.432bn in QE as we look to enter Tapril
  • Those questioning ECB guidance are in the minority says ECB's Smets
  • ECB's Praet: If we remove support progress towards ECB's targets may stall
  • Fed's Evans: We pay attention to the dollar's impact on inflation
  • White House aiming for August bill on tax reform, says will consult with Congress
  • ECB's Praet: Monetary policy focus is the deposit rate

Markets:

  • Gold gains $12 to $1254
  • S&P 500 down 2.4 points to 2341
  • US 10-year yields down 3.4 bps to 2.38%
  • GBP leads, AUD lags

The US dollar and risk assets were taking a beating as US traders arrived and that continued for another hour after New York ramped up. But from there it slowly reversed in a solid bounce from the dollar bulls.

EUR/USD hit the best levels of the year, ticking above 1.09 but has faded back to 1.0860.

USD/JPY traced out a double bottom just above 110.00, which is an important support level, and it climbed to 110.65.

Part of the reason for the turnaround was increasing talk that Trump and/or may take another crack at healthcare reform by involving Democrats and crafting a compromise. At the same point, there is optimism on tax reform because Republicans will feel pressure to succeed.

Cable finally recovered the early-March drop as it tracked above 1.2560 and hit some stops in a climb to 1.2620 but some late-day selling pared the enthusiasm in a slip back to 1.2560.

Despite all the US dollar selling, the commodity currencies couldn't take advantage. CAD was hampered by an early slump in oil prices but even when crude make a comeback, the loonie couldn't get off the floor. The pair finished 35 pips higher on the day. Poloz is up tomorrow.

AUD was a laggard in a disappointment for the bulls. Part of the story could be month-end flows and the risk trade. Debelle is up next on the calendar.