Article / 21 June 2016 at 23:00 GMT

US Market Wrap: Dollar rebounds as pound slips on slim 'Bremain' lead

FX Consultant / IFXA Ltd


  • Australia: Westpac Leading Index                                               2030 GMT                                                          

US Data released :

  • API Weekly Crude Oil Stock (Actual -5.22 million barrels vs previous week 1.5 mln barrels)

So much for US dollar bears being in control of the market. They were beaten with the proverbial ugly stick when Sterling unwound yesterday’s rally. GBPUSD dropped from a peak of 1.4782 at the start of today’s session and finished at just 1.4627, the low of the day. Another poll gave the "Bremain" camp a mere 1 point lead; 45% vs. 44% to quit the European Union, which helped fuel the selloff. That move spread across the G10 spectrum and the US dollar ended the day on an “up” note.

Elsewhere, Mario Draghi echoed Bank of Japan governor Haruhiko Kuroda’s sentiments and said that the European Central Bank is ready to take action if Britain votes to leave the EU. Of course he did; what else could he say?

Federal Open Market Committee chair Janet Yellen had another turn in the spotlight, this time with her semi-annual testimony to Congress. She didn’t say anything new, but admitted that the weak nonfarm payrolls report justified the FOMC’s cautious stance. So much for her earlier comment that "no one data point was definitive”.

The oil price declined in the morning, acting in concert with the rising US dollar. But it then reversed itself just ahead of lunch and than accelerated at the end of the day when API reported a 5.2 million barrel drawdown. WTI Traded from a low of $48.10/barrel to $50.37/b in after-hours trading. USDCAD barely budged on the news.

 WTI made gains in after-hours trading, surging above $50/barrel, but the news had little immediate impact on commodity-driven currencies such as the Canadian dollar. Photo: iStock

For more on forex, click here.

– Edited by Robert Ryan

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.


Even the best looking technical set-ups can be seriously messed up by an event like Brexit says TradingFloor contributor, Clive Lambert in: Why I'm thinking of ignoring all my charts

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

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