Article / 21 September 2017 at 22:39 GMT

US Market Wrap: Sterling soars ahead of UK PM May's speech

FX Trade Strategist /
 FX Rates

Watch list
  • Japan: Foreign Investment 2350 GMT 

US Data Released
  • Initial Jobless claims (Actual 259,000 vs forecast 300,000) 
  • Philadelphia Fed Manufacturing Survey (Actual 23.8 vs 17.2) 
  • Housing Price Index-July (Actual 0.2% vs forecast 0.4%, m/m) 

Oh, what a difference a day makes. On Wednesday, traders were expecting answers and clarity from the Federal Open Market Committee statement, updated projections and Fed Chair Janet Yellen’s press conference. Today, traders either forgot everything the FOMC offered, or just didn’t care.
EURUSD slipped to 1.1892 in early trading and then climbed steadily to 1.1952 when Europe went home for the day. Prices slipped slightly in dull afternoon trading. Traders ignored today’s US data, which was mostly better than expected. Eurozone consumer confidence improved (actual -1.2 versus forecast -1.5). European Central Bank President Mario Draghi didn’t comment about quantitative easing in his speech.
Sterling rallied hard, rising from 1.37472 to 1.3584. Most of the action started late in the morning and continued throughout the afternoon. Reports that British PM Therese May and her cabinet had agreed on the final draft of her speech to the EU on Friday supported the move.
USDJPY traded sideways and held on to yesterday’s post-FOMC gains. Traders did not appear worried about North Korea’s reaction to the latest US sanctions.
Thursday seemed like a commodity currency bloc trading holiday. Well, not really, but AUDUSD, NZDUSD and USDCAD traded sideways in narrow bands. Soft commodity prices contributed to the inertia.
WTI oil prices fell in the early morning on Thursday, rallied in the afternoon and closed a tad higher than the open. Traders are waiting patiently for news from Friday’s Opec meeting.
Wall Street found that all good things come to an end, especially winning streaks. The Dow Jones Industrial Average streak came to an end. Still, the three major indices recovered from their worst levels. A drop in Apple shares (AAPL: NASDAQ) is being blamed for the slide in the Nasdaq.

 WTI oil prices rallied on Thursday afternoon and closed a tad higher than the open. Traders are awaiting news from today's Opec meeting. Photo: Shutterstock

– Edited by Robert Ryan

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Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.
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