Article / 07 June 2016 at 23:09 GMT

US Market Wrap: Plenty of demand for commodity bloc currencies

FX Trade Strategist /


  • Japan:  GDP, Trade Balance and current Account                           2350 GMT                                                                                      
US Data released

  • API Weekly Crude Stock change (Actual -3.68 mln barrels vs. previous 2.35 mln barrels)

The mild “risk-on” sentiment evident in Europe became lost on the other side of the Atlantic. EURUSD bounced in a very narrow 1.1338-1.1368 band, USDJPY gave back all of its overnight gains and GBPUSD drifted lower.

The commodity currency bloc had a pretty good day.  AUDUSD managed to keep its overnight gains but didn’t add to them unlike NZDUSD which extended the overnight high at 0.6950 to 0.6980, where it finished the day. And USDCAD stayed well within the overnight range until American Petroleum Institute crude inventories data was released at the end of the day, and it moved lower.

US equity markets were not impressed with global equity gains and were content to close the day pretty close to where they started. A lack of actionable US data coupled with Federal Reserve interest rate hike confusion tempered trading enthusiasm.

Crude oil traders like the Fed's ambiguity on interest rates. WTI pushed above $50barrel again in the morning, retreated and finally rallied in the afternoon, peaking at $50.50/b. The API news of the 2.3 million barrel drawdown didn’t spark any excitement, but oil still closed near the high of the day.


The API news of a 2.3 million barrel drawdown in crude inventories didn’t spark any excitement, and oil still closed near its high point for the day. Photo: iStock


The South African Rand may have some upside says Dylan Bester, Head of Private Sales, Saxo Capital Markets, South Africa, in: "There's hope for South Africa's rand despite S&P's downgrade".

For an interesting take on the Fed and Brexit read, TradingFloor contributor, Neil Staines' article: Equities fragile, FX volatile

– Edited by Robert Ryan

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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