04 October 2016 at 21:51 GMT
US data released
- API Crude Stocks Change (Actual down 7.6 million barrels vs. previous down 0.75 m/b)
EURUSD traders were awoken from their slumber today. The single currency had declined steadily throughout the European session. The losses were compounded by hawkish remarks from Richmond Fed President Jeffrey Lacker advocating a pre-emptive rate hike.
EURUSD bears were starting to drool with anticipation of additional losses when Bloomberg reported that “sources” at the European Central Bank said the central bank was building a tapering concession. EURUSD jumped from 1.1137 to 1.1237 before settling in back above 1.1200.
The talk of hard-line Brexit negotiations fuelled additional sterling selling again today with GBPUSD closing at the day's low of 1.2718.
And there was more. The International Monetary fund delivered on its promise and downgraded US 2016 growth to 1.6%. The news wasn’t seen as a US dollar negative as the greenback rallied against everything but the euro and Swiss franc.
The commodity currency bloc was beaten up, led by the kiwi. NZDUSD dropped from 0.7290 to 0.7198 on news of a 3.2% decline in the GlobalDairyTrade index. The Australian and Canadian dollars dipped on general US dollar strength.
Oil prices were choppy. WTI see-sawed within a $48.30-$49.10 band all day and closed at the low. The steep decline in API crude stocks drove WTI to $49.23 from the close of $48.65, in after-hours trading.
US equity traders apparently listened to the hawkish Fed comments and sold equities for the second day in a row.
Going up ... EURUSD jumped after reports the European Central Bank said the central bank
was building a tapering concession. Photo: iStock
– Edited by Gayle Bryant
Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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