26 January 2017 at 22:15 GMT
- Japan: National and Tokyo CPI (2330 GMT)
US data released
- Initial Jobless Claims (Actual 259,000 vs. forecast 247,000)
- Wholesale Inventories – December (Actual 1% vs forecast 0.9%)
- Chicago Fed National Activity Index – December (Actual 0.14 vs. previous -0.33)
- New Home Sales change – December (Actual -10.4% vs forecast -1.0% m/m)
- CB Leading Indicators – December (Actual 0.5% vs forecast 0.2%, m/m)
The US dollar inched higher against all the major currencies, except the Canadian dollar in a whippy FX session. EURUSD opened near the high of 1.0735, and dropped steadily to a low of 1.0655 at lunch time. A mid-afternoon rally ended at 1.0703 and EURUSD ended the day at 1.0660. USDJPY moved from a low of 114.05 to 114.82 by noon and then spent the afternoon in a 114.25-114.68 range.
The common theme was rising US protectionist fears fuelled by news that Mexico’s President cancelled a meeting with Donald Trump. Later in the afternoon headlines came out that President Trump will impose a 20% tariff on imports from Mexico, to pay for the wall.
UK Prime Minister Theresa May addressed the Republican Party in Philadelphia at the end of the day. She appeared to be auditioning for a “best friend forever" slot while reminding Republicans of the close ties that bind each country. GDPUSD traders were not amused and GBPUSD slipped to 1.2582 from a pre-speech level of 1.2610.
The Canadian dollar and the antipodean currencies chopped around within their recent ranges.
Oil prices followed equity markets higher. WTI rallied from $52.75 to $54.03 before slipping to $53.81 at day’s end. US equities indices remained firm. The Dow Jones Industrial Average closed in the green at 20,100.91, while the S&P 500 and the Nasdaq were almost unchanged. In after-hours earnings reports, Alphabet dropped on an earnings miss while Microsoft shares had modest gains following better-than-expected quarterly results.
Oil prices followed equity markets higher, with WTI finishing at $53.81/b. Photo: iStock
– Edited by Gayle Bryant
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.