27 February 2017 at 22:20 GMT
- Japan: Retail Trade 2350 GMT
- Industrial Production 2350 GMT
US Data Released
- Durable Goods-Jan. (Actual 1.7% vs. forecast 1.7%,), Ex-Transportation (Actual -0.2% vs. forecast 0.5%)
- Pending Home Sales -Jan. (Actual -2.8% vs. forecast 0.8%, m/m)
New York traders walked into a pretty quiet FX market on Monday, which then got nosier following the morning’s US data releases. The headline numbers did not look very impressive, yet they really weren’t that bad. Durable Goods beat the consensus forecast by a smidgen and the decline in Pending Home Sales was a due to insufficient supply.
The economic data drove EURUSD from 1.0578 to 1.0629 by noon. In that time frame, USDJPY dropped to ¥111.94 from ¥112.50, USDCHF found an overnight low and the commodity currency bloc climbed higher. Even Sterling got into the act, shrugging off weakness from Scottish referendum chatter to rally from 1.2401 to 1.2476 It was a different story after lunch. Dallas Federal Reserve President Steven Kaplan sounded upbeat on the US economy. He described monetary policy as “highly accommodative" and recommended that the Fed should start removing that accommodation slowly. That isn’t a whole lot different from what other Fed speakers have been saying for the past few weeks. However, it was just ahead of President Trump’s speech on Tuesday and the dollar caught a bid.
New York closed with the US dollar back to the New York opening levels (more or less). The euro, Australian dollar and New Zealand dollar were almost unchanged on the day while the yen, the Canadian dollar and the Swiss Franc sank. Sterling posted a tiny gain.
Wall Street was close to flat on the day. Tesla (TSLA: Nasdaq) ran out of juice after Goldman Sachs analysts downgraded the innovative electric car company to a sell.
Crude oil prices gave back earlier gains and finished the day close to where they closed on Friday, with oil traders following the lead of FX markets.
Elusive gains ... crude prices initially crept higher on Monday, but later retreated and ended up close to Friday's levels. Photo: Shutterstock
– Edited by Robert Ryan
Michael O'Neill is an FX consultant and 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.