16 February 2017 at 22:47 GMT
US Data Released
- Philadelphia Fed Manufacturing Survey (Actual 43.3 vs. forecast 18.0)
- Initial Jobless Claims (Actual 239,000 vs. forecast 245,000)
- Housing Starts Change-January (Actual -2.6% vs. previous 11.3%)
President Trump took credit for the stock market rally and rebuffed accounts of a chaotic White House. He said “I see stories of chaos. It’s the exact opposite. This administration is running like a fine-tuned machine." His press conference did not have any impact on FX markets except to provide traders with an afternoon diversion.
EURUSD was drifting high when New York opened and it continued to do so throughout the day. It peaked at 1.0678 at lunch time, dipped in the afternoon, and closed at the high.
Sterling traded sideways in the morning and dipped to the day’s low at 1.2459 when London went home for the day. It perked up in the afternoon and recouped some losses to close at 1.2488.
USDJPY moved higher in the morning following strong US data. But the rally stalled at ¥113.82. Profit takers emerged and drove USDJPY to a low of ¥113.07 by mid-afternoon but it inched up into the close
AUDUSD and NZDUSD held their own. The antipodeans traded sideways and finished the day right where they started. That wasn’t the case for the Canadian dollar. USDCAD tested support in the 1.3010 area just before the US data dump and then rallied throughout the day to close at the high of 1.3078.
This morning’s US data was rather robust. The Philadelphia Manufacturing Index hit a level not seen since 1984 and Initial Jobless Claims beat forecasts.
Wall Street liked the economic data but not enough to drive the major indices higher. The Dow Jones, S&P 500 and Nasdaq finished the day close to flat. Zero Hedge published an article that suggests an explanation to the S&P 500 rally. Catalyst Capital denies that they are to blame for the price swings.
Oil prices hit turbulence WTI opened firm at $53.17/barrel, climbed to $53.56/b and then plunged down to just $52.66/b at mid-morning. WTI recovered all those losses when London closed following a report that Opec could extend production cuts that are scheduled to end in May.
Crude oil prices lost ground, but recovered the falls on reports that Opec could extend production cuts that had been scheduled to end in May. Photo: Shutterstock
– Edited by Robert Ryan
Michael O'Neill is an FX consultant and currency strategist at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.