15 August 2017 at 23:09 GMT
- No releases of note scheduled
US data released
- NAHB Housing Market Index-August (Actual 68 vs. forecast 65)
- Business Inventories-June (Actual 0.5% vs. forecast 0.4%)
- Retail Sales-July (Actual 0.6% vs. forecast 0.4%)
- Retail Sales, ex Autos-July (Actual 0.5% vs. forecast 0.3%)
- Export Price Index-July (Actual 0.4% vs. forecast 0.2%, m/m)
- Import Price Index-July (Actual 0.1% vs. forecast 0.1%, m/m)
- API Weekly Crude Stocks change (Actual -9.2 million barrels versus previous -7.83mln barrels)
The US dollar was bid when New York traders got to their desks and it became even more bid after a deluge of economic data.
Yesterday, New York Fed President William Dudley said he was on board for another rate increase in 2017 “if the economy holds up". Data released on Tuesday suggested to some traders that the US economy is indeed holding up, so they bought dollars. The Retail Sales jump boosted the Atlanta Fed GDPNow forecast for Q3 to 3.7% from 3.5%.
The dollar rally didn’t hold up, though. EURUSD dove from 1.1755 to 1.1688 after the release of Retail Sales beat expectations. It then reversed course and climbed steadily throughout the day, to close at 1.1739.
USDJPY popped to ¥110.83 from ¥110.38, after the release of the economic reports, but quickly dropped back to ¥110.38. The price inched a little higher in the afternoon closed at ¥110.55.
A weaker than expected July UK inflation report (although it was unchanged from June) sank GBPUSD just as New York was opening and the US data extended those losses, marginally. GBPUSD traded between 1.2847 and 1.2864 for the rest of the session and closed at the top of that range.
The commodity currencies were busy. NZDUSD dropped below support at 0.7280 and bottomed out at 0.7231. Bearish technicals and a soft Global Dairy Trade auction (Actual -0.4%) weighed on the currency pair. AUDUSD moved lower and traded within a 0.7808-0.7840 band. USDCAD rallied but hit a wall of resistance at 1.2776, dropped to 1.2740 and then traded sideways around 1.2750 for the rest of the day.
Crude oil prices dipped then rallied. WTI opened at $47.53/barrel, dropped to $47.05/b and then rebounded to $47.61/b by day's end. A 9.2 million barrel drop in crude inventories as reported by the American Petroleum Institute lifted WTI to $47.85/b in after-hours trading.
Wall Street finished close to flat on the day in another low volume session.
Bearish technical trends and a soft result from the Global Dairy Trade auction weighed on NZDUSD. Photo: Shutterstock
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– Edited by Robert Ryan
Michael O'Neill is an FX consultant, 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.