Forex news for US trading on May 23, 2017:
- April US new home sales 569K vs 610K expected
- Richmond Fed manufacturing index +1 vs +15 expected
- Markit May prelim manufacturing PMI 52.5 vs 53.0 expected
- Fed's Kashkari: Wants to see more economic data before making June decision
- German FM Schaeble: Must find pragmatic solutions to strengthen the euro.
- US sells 2-year notes at 1.316% vs 1.322% WI
- White House says sale of strategic oil reserves could be done without hurting producers
- ECB's Coeure: Wage restrain poses challenge in lifting inflation
- White House sends budget request to Congress
- Canada wholesale trade come in at 0.9% vs 0.8% estimate
- Gold down $9 to $1251
- WTI crude up 38-cents to $51.52
- S&P 500 up 4 points to 2398
- US 10-year yields up 3.3 bps to 2.29%
- NZD leads, EUR lags
The market is starting to get the sense that the Fed is going to hike rates in mid-June and that the US political situation will work itself out.
That was the signal from the bond and stock markets. Treasures, in particular, sold off on the reversal of safe haven flows. The move accelerated after the sales of 52-week T-bills and 2-year T-notes. The yield on the 2yr sale was the highest since 2008.
USD/JPY traded near 111.10 as US traders arrived. It had been in a narrow range in Europe and Asia but jumped into the London close in a one-way move to 111.75 before retracing 25 pips and then embarking on a fresh climb to a high of 111.86 at day's end.
That was part of a broader US dollar bid that sent the euro down to 1.1183 from 1.1225 and sapped 30 pips from the recently-strong commodity currencies. The kiwi was the high-flyer earlier in the day but it ran into resistance near 0.7050 and fell back to the big figure.
Cable was hit by some intraday flow-driven moves. A big bid appeared into the London fix and quickly sent the pair up to 1.3020 from 1.2975. The chop continued for an hour and hit 1.3032 but later in the day sellers jumped on the pair as the USD bid arrived and it sank all the way back to 1.2960, finishing near a US low.