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Overview
Wednesday’s FX session played out as many expected it to, with Tuesday evening’s Yellen speech in NY setting the stage for further weakness in the USD. Early Europe proceeded with a stronger EUR/USD push through 1.1300, and later in the day – with the help of North American markets – we extended through the recent 1.1342 highs, with the Feb peak at 1.1375 now in the line of fire. Cable was an easy target also, trading to 1.4450, and although only managing another 5-10 ticks beyond this, NY look set to test levels closer to 1.4500. AUD/USD highs at .7680 were taken out in am London, but we continue to run into decent offers above .7700. .6900 was a long term resistance point for the NZD, but was erased with ease. Focus turned elsewhere once removed, but prospect for .7000+ now very much on the cards.
USD/CAD found some initial support at 1.3000 through Europe, but once breached, it was not long until focus turned to the 1.2920 base seen almost 2 weeks ago. With the aid of a smaller Crude build reported by the DoE, we broke through this level to maintain the USD selling momentum. The USD index through 94.578 should generate another round of USD sales, and North American players will almost certainly push for this. ADP came as expected at 200k up, but only a strong showing in the US payrolls number on Friday can help stop the USD rot, though month end flow Thursday may apply some near term support.
Daily FX Wrap: Post Yellen fallout continues as USD rout seen across the board. Commodity currencies take out notable highs – NZD through .6900.
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