22 August 2017 at 23:47 GMT
US Data Released:
- Housing Price Index-June (Actual 0.1% vs. forecast 0.4%)
- Richmond Fed Manufacturing Index-August (Actual 14 vs. Previous 14)
- API Crude Stocks Change (Actual -3.59 million barrels vs. previous -9.2 m/b
Expectations are building around the Jackson Hole Symposium later this week. Some are expecting that either Federal Reserve chair Janet Yellen or European Central Bank president Mario Draghi (or both) will shed light on the future direction of monetary policy. Others think it will be a non-event for FX markets.
The US dollar opened with gains across the board after the Eurozone ZEW Economic Sentiment Indicator missed its forecast. EURUSD opened at 1.1758. That proved to be the day’s low and traded sideways for the rest of the session, closing where it opened.
Sterling didn’t trade much differently from the euro but it closed with a negative bias due to bearish technicals.
USDJPY inched higher, rising from 109.15 to 109.64 on the back of moderately diminished US/ North Korea tensions and broad US dollar strength.
AUDUSD and NZDUSD enjoyed a rally until mid-morning when both moves were reversed. AUDUSD closed unchanged while NZDUSD was slightly weaker.
USDCAD dropped from 1.2585 to 1.2527 when Canadian retail sales were higher than forecast. The data was quickly forgotten, and USDCAD climbed back to 1.2570 at the end of the day. Oil prices were not a factor.
WTI jumped to $48.09/barrel from $47.22/b during the morning and settled in around $47.75/b for the afternoon, A rumour that API would report a draw down of 3.5 million barrels helped the rally. It proved to be correct. Prices declined to $47.50/b in after-hours trading.
Wall Street had a good day. Stocks were higher on hopes (dreams, fantasies) that the White House administration is making progress on tax cut plans.
The Street had a good day, but was it more about hope than reality? Photo: Shutterstock
-- Edited by Adam Courtenay
Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.