Article / 24 May 2016 at 22:28 GMT

US Market Wrap: Fed hike fears sink euro and yen

FX Consultant / IFXA Ltd


  • New Zealand: Trade Balance                                                              2245 GMT
US Data released:

  • New Home Sales-April (Actual 619,000 vs forecast 523,000, m/m)
  • American Petroleum Institute (Weekly Crude stocks -5.137 million barrels)

FX markets were lively on Tuesday. EURUSD continued its overnight slide throughout the New York session, spurred on by a sharp rise in New Home Sales, which reached yet another post-financial crisis high. The data added support for the hawks looking for the Fed to rates in June or July.

The USDJPY rally that began in Europe continued throughout the morning, but ran out of steam just above ¥110.00 and hung around that level for the rest of the day. New York traders added to GBPUSD gains following a report that the Brexit "stay in the EU" camp had a 13 point lead over the "leave" side.

Crude oil prices rallied, in part on anticipation of further confirmation that crude stock supplies were diminishing. That rally ran out of gas at $48.97/barrel by mid-morning and crude traded sideways until 1630 GMT. That’s when the API data was released. The 5.1 million barrel drawdown caused WTI to spike to $49.18/b from $48.85/b. USDCAD retreated on the news.

US equities had a stellar day with both the Nasdaq and the S&P 500 approaching key resistance levels. The Wall Street Journal reported that Hewlett Packard Enterprise Co (HPE:NYSE)  would spin off its enterprise service group and merge it with computer Sciences Corp. HP rose 1.71% in after-hours trading.


 Moving on up ... a jump in US home sales dds support to those who think the Fed is ready to hike rates in June or July. Photo: iStock


The Russia eurobond issue is an expensive way to gauge foreign interest in Russia's FX debt says TradingFloor contributor, Nadia Kazakova in: Russia's $3bn eurobond to kill two birds with one stone

– Edited by Robert Ryan

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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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