Article / 15 June 2016 at 23:00 GMT

US Market Wrap: FOMC waits for sun, moon and stars to align

FX Consultant / IFXA Ltd



  • Japan: BoJ Interest Rate decision and statement                         2000 GMT                                                                                  
US Data released

  • PPI May (actual 0.4% vs. forecast 0.3%; ex food and energy, actual 0.3% vs forecast 0.1%, m/m)
  • Industrial Production May (Actual minus 0.4% vs. forecast minus 0.2%)
  • Capacity Utilisation May (Actual 74.9% vs. Forecast 75.2%)
  • EIA Crude Stocks Change (Actual minus 0.933 m/b vs forecast minus 2.26 m/b)

FX Traders had a “rethink” of this week's moves and dialled back their risk-averse, US dollar buying sentiment. US dollars were sold against EUR, GBP and JPY during the morning with weak US Industrial Production data supporting the move. Selling dollars proved to be a smart move.
The Federal Open Market Committee left rates unchanged and delivered a dovish statement to go along with downgraded economic projections. EURUSD soared, USDJPY sank and both currency pairs returned to the pre-FOMC statement levels. Next up is the Bank of Japan.

Oil prices had a wild to-ing and fro-ing session, dropping as the US dollar rose then soaring after the EIA announced a draw-down in crude stocks. WTI peaked at $48.70/barrel and then dropped steadily in the afternoon, closing at $47.45.

US equity traders were not amused.  The dovish Federal Reserve didn’t surprise a whole lot of people but the uncertainty surrounding the upcoming Brexit vote has traders a tad antsy. The three major indices all finished in the red.

 The FOMC left rates unchanged and delivered a dovish statement to go along
with downgraded economic projections. Photo: iStock

– Edited by Gayle Bryant

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.

Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.

16 June
John Roberti John Roberti
dear Michael,
16 June
John Roberti John Roberti
two days ago, you indicated that USDCAD could go over 1,2900. It is now at 1,2970 and Oil prices, after the jump of EIA release, went back to pre EIA levels yesterday night, and continue to decline today. Thus your opinion on USDCAD would be appreciated assuming oil prices continuing to decline, taking also in consideration that Poloz confirmed the decline to -1/4% GDP in the second quarter due to Alberta fires. Thanks in advance for you opinion
16 June
John Shaw John  Shaw
Great piece this morning Mike. Thanks for sharing.


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