- Mixed to soft US data helps undermine greenback
- Trump tweets China and Russia playing currency manipulation game
- Wall Street rallies but closes below intraday peaks
By Michael O’Neill
NY Focus: The US dollar was trading softly when New York traders started their day. The European session was dreary because of a lack of economic data to give direction. The US session had data, and it was dreary as well.
US March retail sales rose 0.6% m/m (forecast 0.3%, m/m) while retail sales-ex-autos rose 0.2% (forecast 0.3%). Traders may have been a tad disappointed as some were expecting better than forecast results in both categories. Empire State Manufacturing Index dropped to 15.8 from 22.5 in March and the NAHB Housing Market Index dipped to 69 from 70, previously.
President Trump has nominated Richard Clarida, a Pacific Investment Management Company global strategist and economist for Fed Vice Chair. He also nominated Michelle Bowman, a Kansas Bank examiner as a Fed governor.
President Trump's tweet: Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!” , did not have an impact on FX
The Twitter-in-Chief fired off another volley at China. Markets shrugged.
Pic: Casimiro PT / Shutterstock.com
Sterling has a good day. The broad US dollar weakness, UK rate hike expectations and diminished “hard” Brexit risks continue to underpin the currency pair. That may change on Tuesday after the release of the UK employment report.
The commodity currency bloc gained along with the improved tone to global risk. The reduced chances for a global trade war and relief at the lack of negative fall-out from the missile attack on Syria contributed to the gains.
Wall Street rallied with the fading geopolitical trade and war tensions and ahead of expected strong earnings reports. Prices climbed steadily until the afternoon when the gave up about half of the day's gains. Netflix (NFLX: NASDAQ) added two million new subscribers in Q1 and shares soared, rising from $307.78 at the close to $329.00 in after-hours trading.
Tuesday Focus: UK employment data may be the trigger for a sharp spike in GBPUSD on a break of resistance in the 1.4350-60 area. Weaker than expected data would lead to a retest of 1.4240 support, the bottom of a steep uptrend channel.
Chart: GBPUSD 4 hour
– Edited by Clare MacCarthy
Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net.
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