Article / 21 July 2016 at 22:50 GMT

US Market Wrap: Noisy choppy FX trading goes nowhere

FX Consultant / IFXA Ltd

  • Japan: Foreign Investment 1950 GMT 
  • China: MNI Business Sentiment Index 2145 GMT 
  • Japan: Nikkei Manufacturing PMI 2200 GMT                                                  

US data released

  • Jobless Claims (Actual 253,000 vs prior week, 254,000) 
  • Housing Price Index May (Actual 0.2% vs. previous 0.2%, m/m) 
  • Existing Home Sales June (Actual1.1% vs. forecast -0.5%, m/m) 
  • CB Leading Indicators (Actual 0.3% vs. forecast 0.2%) 

It was a promising start to the day, action wise. USDJPY was sinking under the weight of Bank of Japan Governor Haruhiko Kuroda’s comments. They really put a wet blanket over anticipated monetary stimulus hopes. EURUSD was sliding lower ahead of what was supposed to be a non-event European Central Bank interest rate decision and press conference. It was. And EURUSD ended the day where it started: 1.1019

By the end of the day, the G10 currencies were either at their opening levels or very close to them. In between, there were some interesting developments. US Existing Home Sales were well above expectations and Jobless Claims were at a three-month low. Mario Draghi and his colleagues at the ECB are cautious and said it was too early to determine the economic fallout from Brexit. Turkey entered into a three-month state of emergency. Despite all this, traders appeared to be more bothered by the heat rather than the news.

Oil prices were soft. Today’s excuse is that traders are concerned about rising inventories especially in gasoline. Prices slid throughout the day and the market closed at the low. That move drove USDCAD back to the day's high.

Equity markets were down, albeit modestly and without enthusiasm even as GM (GM: NYSE) announced that Q2 profits more than doubled to $2.87 billion.

 Not today thanks ... Bank of Japan Governor Haruhiko Kuroda ruled out
the idea of using 'helicopter money', causing USDJPY to sink. Photo: iStock


Check out Saxo Bank's Head of FX strategy, John Hardy's comment on the ECB meeting.

– 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.


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