Article / 12 September 2017 at 23:56 GMT

US Market Wrap: USD, sterling rally ahead of data

FX Trade Strategist /

Watch list:

  • New Zealand: Food Price Index-August  2245 GMT 
  • Japan: Dometic Corporate Goods Price Index-August 2350 GMT 
  • Japan: BSI Large Manufacturing  2350 GMT

US Data Released

  • JOLTS-Job Openings (Actual 6.170 million vs forecast 5.96 million) 
  • API Weekly Crude Stocks change (Actual 6.18 million barrels vs previous 2.79 m/b)

What a day. President Trump goaded North Korea, the main US equity indices posted record highs, Apple got a busy signal, and the US dollar was in demand. Despite all of that, markets were orderly.

EURUSD opened with an offered tone and dropped to 1.1927 from 1.1960 as traders were finishing their second cup of coffee.

 Going up: August CPI put a little more vigour into Sterling. Photo: Shutterstock

Prices moved higher throughout the morning, stagnated in the afternoon and closed at 1.1967.

Traders polished Sterling, and it was the only currency to gain during the session.

Follow-through demand after better than expected UK data, including August CPI (Actual 2.9% against forecast 2.8%) drove GBPUSD to a closing level of 1.3285, just below the day’s high of 1.3296.

Traders are looking toward a strong employment report on Wednesday, and many are expecting a rate hike on Thursday.

USDJPY continued its “relief rally” but got an added boost with the rise in US Treasury yields. It rose from 109.65 to finish the session at 110.20.

Traders ignored President Trump's not-so-subtle threat to North Korea. He said: “I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen.”

The commodity bloc currencies lost ground, led by the Canadian dollar. USDCAD rallied from 1.2120 to 1.2187 on the back of broad US dollar strength and short covering ahead of Thursday’s US inflation report.

AUDUSD was more subdued and traded in a 0.8015-0.8040 band. NZDUSD drifted down from 0.7315 to 0.7275.

Oil prices were whippy in a $47.80-$48,41 range. Opec’s Monthly Oil Market Report predicted a 1.42 million barrel/day rise in 2017 oil demand while upwardly revising the 2017 global GDP outlook.

API reported a rise in crude inventories which should come as a surprise due to the shutdown of refineries in Texas.

The Dow Jones Industrial Average, S&P 500 and the Nasdaq all closed with record highs. The highly anticipated Apple (AAPPL: Nasdaq) production launch didn't do much for the stock in after-hours trading.

-- Edited by Adam Courtenay

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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